Moody’s affirmed Costa Rica’s Ba3 long-term issuer ratings with a positive outlook. Costa Rica’s credit profile reflects strong economic growth (4.3% in 2024, above the 3.9% forecast), but also significant debt challenges, including interest payments that exceeded 16% of government revenue in 2023. Still, with debt-to-GDP below 60%, the fiscal rule provides more flexibility in capital expenditure, expected to help reduce debt further. Costa Rica’s economic dynamism, supported by the stable exchange rate and stronger-than-expected economic growth, has allowed for a faster-than-expected debt reduction, improving the country’s financial position. Support from the strong exchange rate (approximately 35% of government debt is denominated in foreign currency) and stronger-than-expected economic growth allowed for the faster decline in debt.