Economy & Business - December 2021


COSTA RICA | Gov’t hails fiscal progress but cites room for improvement. On 18 November, Costa Rica’s finance ministry released new figures which show the country’s fiscal deficit to October was ¢1.54trn (US$2.4bn), representing 3.96% of GDP. This compares with ¢2.5trn registered at the same point in 2020, which was equivalent to 6.91% of GDP. As of October 2021, public debt was ¢27.5trn (71.03% of GDP). The finance ministry said that these results were favourable but insufficient to ensure financial stability in the long term, and it called for the approval of initiatives currently under discussion in the legislature (such as the public employment bill introducing a single pay scale and eliminating other salary components). The finance ministry also highlighted that interest payments on debt reached ¢1.65trn (4.26% of GDP) – the highest of the last 15 years. The government has previously said that the fiscal adjustment outlined in the International Monetary Fund (IMF) agreement approved by the legislature in July would be “transcendental” to reducing this. Last year, following the arrival of the coronavirus (Covid-19) pandemic, Costa Rica posted a fiscal deficit of 8.1% of GDP, and a public debt of 67.5% of GDP.

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