Costa Rica raises 2011 growth estimate to 4.5%

Costa Rica’s economy will expand 4.5 percent this year, the central bank said on Tuesday, raising an initial forecast as foreign companies invest in telecommunications and outsourcing. In January, the central bank said 2011 growth would be 4.3 percent and 4.5 percent in 2012 but upped both estimates by 0.2 percentage points as prospects for the economy improved. The small Central American nation is now expected to grow 4.7 percent in 2012. “Outsourcing services and other significant investments made in the free-trade zones ... are enabling this acceleration,” said central bank president Rodrigo Bolanos. Beach-lined and jungle-covered Costa Rica is known as a popular spot for tourists but has recently attracted more high-tech factories and call centers. Bank of Canada keeps key rate at 1% The Bank of Canada kept its main interest rate unchanged and said borrowing costs will increase as the economy recovers, with policy makers dropping the word “eventually” to describe the timing of their next move. The target for overnight loans between commercial banks remained 1 percent, where it’s been since September, as forecast by all 26 economists surveyed by Bloomberg News. The Ottawa- based bank also raised its outlook for so-called core inflation and affirmed the economy will reach full output by the middle of 2012 while trimming this year’s growth forecast. “To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn,” the central bank said in a statement. “Such reduction would need to be carefully considered.” Russia Arctic route to rival Suez may aid Sovcomflot IPO Russia plans to revive a Soviet-era Arctic sea passage to service energy projects and provide a shorter supply route to Asia for carriers such as OAO Sovcomflot as the shipping line prepares for an initial share sale this year. Opening the northern sea route may allow state-owned Sovcomflot to speed natural-gas deliveries to China and win cargos between Europe and Asia by offering a quicker alternative to the Suez Canal. “If Russia gives the green light to develop this as a full commercial transit route, it would make Sovcomflot’s whole investment case completely different,” said Chris Weafer, chief strategist at ING Bank NV in Moscow. “It would make it more attractive to potential investors.” Sovcomflot, along with companies such as OAO Novatek, is sending test cargoes via the Arctic route, which Prime Minister Vladimir Putin has vowed to transform into a year-round passage.