Fitch Downgrades Costa Rica to 'B'; Outlook Negative

• Fitch Ratings has downgraded Costa Rica's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B' from 'B+'. The Outlook is Negative.
• The downgrade of Costa Rica's Long-Term Foreign-Currency (LT FC) IDR to 'B' reflects increased risks of near-term financing stress due to widening fiscal deficits, a steep amortization schedule and borrowing constraints, against a background of economic contraction caused by the effects of the coronavirus pandemic.
• The Negative Outlook reflects further downside risks to debt sustainability amid uncertain prospects for post-crisis fiscal consolidation, economic growth and borrowing costs.
• Fitch expects Costa Rica's economy will contract by 4% in 2020, with risks tilted to the downside. Containment measures will lead to a sharp contraction in households' and firms' disposable income, which will affect domestic demand and unemployment.

(Source: Fitch)