Costa Rica: Request for an Arrangement under the Flexible Credit Line-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica
IMF Staff Country Reports, June 3, 2025
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- Costa Rica: Request for an Arrangement under the Flexible Credit Line-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica
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Bibliographic details
- Published: June 3, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229013239.002
Overview
- Publication date: June 3, 2025
- The paper presents Costa Rica’s Request for an Arrangement under the Flexible Credit Line (FCL).
- The authorities intend to treat the arrangement as precautionary and would consider requesting reduced access in the future, risks permitting.
- The arrangement is expected to enhance Costa Rica’s external buffers and provide insurance against external downside risks.
Qualification and Rationale for FCL
- Costa Rica qualifies for the FCL by virtue of:
- "very strong economic fundamentals and institutional policy frameworks"
- "its track record of implementing very strong policies"
- "commitment to maintaining such policies in the future"
- The arrangement is motivated by the country’s vulnerability to a shifting external environment and the need for insurance in the context of increased external risks.
Policy Priorities and Commitments
- Authorities are committed to maintaining strong policies and frameworks.
- Appropriately prioritized policy actions include:
- further reducing public debt
- enshrining central bank independence
- further strengthening financial supervision and crisis management
Arrangement Features and Intent
- The arrangement will:
- enhance Costa Rica’s external buffers
- provide insurance against external downside risks
- Treatment of the arrangement by authorities:
- precautionary stance
- potential future request for reduced access, contingent on risk developments
Downside Risks and External Vulnerabilities
- Identified downside risks include:
- a prolonged increase in global uncertainty
- slower growth in major trading partners
- tighter global financial conditions
- higher oil prices
Staff Conclusions and Expectations
- In the context of increased external risks, the new FCL arrangement is expected to provide valuable insurance.
- Continued strong policy implementation and institutional strengthening are central to maintaining qualification and deriving benefits from the FCL.
Source: International Monetary Fund press release and staff report for Costa Rica, June 3, 2025.
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