Jan 22 (Reuters) - Fitch downgraded the outlook on Costa Rica’s long-term foreign and local currency issuer default ratings (IDR) to negative from stable, citing deteriorating financial conditions.
The ratings agency blamed the country’s financial health on the lower absorption capacity of the domestic public sector investor base and rising pressure on international interest rates.
Fitch affirmed the country’s foreign and local currency bonds at BB+ and short-term foreign currency IDR at B.
“As with various unsuccessful attempts over the last decade, congressional gridlock and adverse court rulings could delay, dilute or block fiscal reform,” the ratings agency said.
Fitch said Costa Rica’s bureaucratic red tape, weak competition in the energy and financial services markets and long-standing infrastructure bottlenecks constrain its growth prospects. (Reporting by Ankush Sharma in Bengaluru; Editing by Savio D‘Souza)