LatinNews Daily - 19 June 2018

Costa Rica: Following a visit to Costa Rica from 12-15 June, the International Monetary Fund (IMF) has issued a statement which highlights that addressing the “unsustainable fiscal situation currently facing the country” is a key priority for the new government led by President Carlos Alvarado, which took office last month. The 57-member unicameral national legislature is currently considering a fiscal reform proposal put forward by the new government, which has also recently introduced measures to cut public spending. The IMF warns that, in the absence of policy measures, the fiscal deficit is expected to reach 7.2% of GDP in 2018, putting the debt of the central government “on an unsustainable path”. Costa Rica’s fiscal deficit closed at 6.2% of GDP in 2017, up from 5.3% in 2016. The IMF press release also notes that “economic activity continues to be solid but has slowed down”, with the average growth rate of the monthly economic activity index (Imae) reaching 3.2% in the first quarter of 2018 (compared with 3.3% in the same period last year).

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