QCOSTARICA | If you need to borrow now is the time. An announcement from Moody’s confirms the limited room for maneuver left to the country when obtaining external financing, compromising access to credit for the private sector.

Costa Rica has received a new warning over a possible lack of access to funds in the international market with which to alleviate its growing fiscal deficit. After China’s decision not to buy US1 billion in bonds , the rating agency Moody’s anticipates a rise in interest rates in the country and a deterioration of credit and growth.

With a picture of growing public debt, Gabriel Torres, an analyst with the ratings agency, told Nacion.com that “… definitely, losing the option of Chinese bonds has made the country’s situation more difficult, because it will have to rely more on domestic funding which will have impact on local interest rates. ”

But issuing debt in the domestic market does not seem to be a good option either. The economist Edna Camacho told the newspaper that “… the size of domestic government borrowing will be so high that it will affect rates in colones and dollars, making financing for the private sector more difficult.”

Meanwhile, the government is clinging to what appears to be the only alternative plan: Congress approving a package of projects related to help combat tax evasion, reducing tax exemptions, management of a single fund for the state, resurrection of the tax on legal persons and public discussion on employment.

Source: Nacion.com