The halls were decked with lights and wreaths at the offices of the Union of Private-Sector Chambers and Associations but there was little holiday cheer in the group’s latest business survey. Over 60 percent of businesses surveyed in the report said that they did not plan to hire any new employees in 2015, according to results released Wednesday.
President Luis Guillermo Solís addressed the nation Sunday evening in a televised speech urging lawmakers to keep his proposed 2015 budget largely intact as a general strike by public sector unions against budget cuts loomed Monday.
President Luis Guillermo Solís told representatives from the Costa Rican Banking Association that Moody’s Investor Services' decision to drop Costa Rica’s investment rating to junk status was not a crisis and urged calm during a meeting Wednesday morning. As the public sector tries to hash out how its weakened standing will affect the budget, consumers may have to pay more for loans in dollars.
The ratings agency Moody Investors Services downgraded Costa Rica’s government bond rating to Ba1 from Baa3 with a stable outlook Tuesday. The decision came weeks after President Luis Guillermo Solís presented his government’s budget for 2015 without any substantial proposals to curb the country’s growing deficit.
One revenue stream the administration seems bully on is improving tax collection. During his 100-day speech, President Luis Guillermo Solís noted that tax evasion, estimated at 13.8 percent of GDP, outpaced actual tax collection during 2013, at 13.1 percent of GDP
But with no plan to curb the rising deficit and investors looking away from emerging markets, it won't last forever.