New Credit Line Supports Costa Rica’s Remarkable Reforms

IMF News, September 23, 2025

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IMF approved a two-year Flexible Credit Line (FCL) for Costa Rica.
The FCL is designed for countries with very strong economic fundamentals and institutional policy frameworks.
The FCL serves as a buffer during periods of heightened global uncertainty, offering access to liquidity if needed and signaling very strong policymaking to markets.
Access to the FCL is reviewed every 12 months.

Costa Rica started to implement an impressive reform agenda in 2015, including:
- a fiscal rule that ties spending to GDP growth and debt levels;
- tax system modernization;
- steps to strengthen the financial system and competition, including submitting a bill to upgrade bank resolution and deposit insurance;
- efforts to cement central bank autonomy;
- a long-term effort to diversify the economy, boosting exports of advanced manufactured goods (such as medical devices, electronics, and aerospace components) and business services (like IT and digital services, business process outsourcing, and call centers).
Key macroeconomic outcomes between 2021 and 2024:
- annual GDP growth averaged 5 percent;
- public debt fell by 8 percentage points of GDP;
- the poverty rate declined by 5 percentage points.
Costa Rica joined the Organization for Economic Cooperation and Development in 2021.

Costa Rica used four different IMF lending facilities since 2020, showing an evolution of IMF support:
- April 2020: Rapid Financing Instrument (RFI) for emergency balance of payments needs.
- 2021–2024: Extended Fund Facility (EFF) to support fiscal reforms, monetary and financial stability, and inclusive growth (including improving social program targeting, supporting job formalization, and encouraging women’s participation and entrepreneurship).
- 2022–2024: Resilience and Sustainability Facility (RSF) to support the country’s climate agenda.
- 2025: Flexible Credit Line (FCL).
Notable milestone: Costa Rica is the first IMF member to go from a lending facility addressing actual balance of payments needs to an FCL within a year, illustrating a transition from stabilization to resilience and the Fund’s agility in adapting support.

The FCL was requested to reinforce investor confidence in Costa Rica’s very strong economic fundamentals and policy frameworks.
Functions and signals:
- Provides insurance against external shocks amid heightened global uncertainty.
- Signals continuous focus on fiscal responsibility, prudent monetary policy, and robust financial regulation.
- Strengthens investor confidence even if the country does not intend to draw from the FCL.
Expected broader benefits:
- Support efforts to safeguard macroeconomic stability;
- Help align policies among Costa Rican authorities, legislators, and other key stakeholders by encouraging continued reform efforts and dialogue;
- Over time, spur growth, help lower financing costs, create jobs, and enable further reductions in poverty.

Maintain very strong policies and institutional frameworks across successive administrations (noting elections next year).
Continue reducing public debt.
Strengthen central bank independence.
Ease supply-side bottlenecks.
Improve the legal framework for financial oversight and crisis management.

International Monetary Fund — "New Credit Line Supports Costa Rica’s Remarkable Reforms", September 23, 2025.