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LatinNews Daily - 08 October 2021

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In brief: IMF hails progress with Costa Rica over EFF agreement

* The International Monetary Fund (IMF) has concluded a virtual mission to Costa Rica on the first review of the country’s economic programme supported by a US$1.76bn three-year arrangement under the Extended Fund Facility (EFF) which was approved by Costa Rica’s legislature in July. An IMF statement said that authorities’ proactive response to the coronavirus (Covid-19) pandemic andpositive external developments are supporting a robust economic recovery”. It adds that with strong export growth and a vigorous vaccination campaign, the outlook has improved and real GDP is now projected to grow by 4.7% in 2021, compared to 2.6% at the time of the EFF request. According to the statement “All of the end-July programme targets were comfortably met in part due to a strong revenue performance, prudent spending, and improving market conditions” and “authorities are on track to meet their fiscal goals under the programme”. It adds that additional revenue measures under discussion in the legislature are “essential to keeping the authorities’ programme on track to achieve a primary surplus target of 1% of GDP by 2023 and ensure public debt-GDP is firmly put on a downward path”. For example it highlights that legislative approval of a public employment bill which introduces a single pay scale and eliminates other salary components “will be critical to strengthen the equity and efficiency of government spending”.