SAN JOSE, July 1 (Reuters) - Costa Rica’s legislative assembly on Monday approved the placement of up to $1.5 billion in bonds in coming months as the Central American country struggles to reduce its mounting debt burden.
Over the past 10 years, public debt in Costa Rica has doubled and now stands at about 53 percent of gross domestic product.
The first tranche of the dollar bond debt issue will be placed in international markets from August, said Rocio Aguilar, Costa Rica’s finance minister.
The government will have a year to complete the bond issue. It had previously sought authorization for a total of $6 billion in bonds, but legislators resolved only to approve the bonds in smaller groupings.
Costa Rica’s legislative assembly last December approved a package of tax hikes and fiscal measures also meant to cut the country’s ballooning debt.
However, Fitch Ratings in January expressed skepticism that the reform could help the government achieve its targeted savings and stabilize debt. The agency downgraded Costa Rica’s issuer default rating two notches to B+ from BB and changed its rating outlook to negative. (Reporting by Alvaro Murillo, Writing by Daina Beth Solomon; Editing by Sam Holmes)