(QCOSTARICA) Excess liquidity in the financial system, soaring loans in dollars, a rising fiscal deficit and a less favorable global environment will complicate the path in the rest of the year and in 2017.
The document “Macroeconomic Review Program 2016-2017” by the Central Bank (Banco Central de Costra Rica – BCCR) says that these four elements are the main factors that could adversely affect overall economic performance.
The report notes that in an environment such as the one just described and with “moderate growth …. of our major trading partners for the biennium 2016-2017, lax conditions for international liquidity and moderate and orderly rises in the international price of raw materials, the macroeconomic projections for this period include the following:
i) The Costa Rican economy will grow by 4.2% in 2016 and 4.3% in 2017, driven mainly by domestic demand; These projections are associated with a current account deficit of 4.2% and 4.4% of GDP respectively. While the current account gap will be financed with long term external resources, available estimates indicate that total flows of net foreign savings (short and long term) planned for the next 18 months may need to be supplemented by the use of RIN.
Read full report by the Central Bank (in spanish).