Thursday, December 11, 2008

IMF chief: Costa Rica well positioned for global slowdown

International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn talks to the media next to Costa Rica's President Oscar Arias at Presidential house in San Jose December 11, 2008.(Photo: Reuters/Juan Carlos Ulate)Washington (Dow Jones) - Costa Rica is in relatively good shape to weather the global economic slowdown, but the country's central bank should remain ready to act, Dominique Strauss-Kahn, managing director of the International Monetary Fund, said Thursday.

Following meetings with President Oscar Arias, Finance Minister Guillermo Zuniga, and central bank chief Francisco de Paula Gutierrez, Strauss-Kahn said there was general agreement that a combination of domestic policy adjustment and external financing are needed to help the Costa Rican economy and people deal with the slowdown.

"In this regard, the country can confront the challenging global environment from a position of relative strength," he said in a statement. "The prudent fiscal stance of recent years provides the authorities with some room for maneuver."

The central bank must remain "vigilant" to ensure "a smooth adjustment in domestic demand and the current account deficit, maintain the attractiveness of local currency assets, and ensure that inflation expectations converge toward the central bank's inflation target," he said.

The IMF stands ready to help Costa Rica or other Latin American countries manage the difficult global environment, he said.

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