LatinNews Daily - 08 March 2022

* Costa Rica’s 57-member unicameral legislature has approved a public employment bill which would introduce a single pay scale and eliminate other salary components. Approval of the bill, which remains unpopular with unions, is key to Costa Rica’s US$1.76bn three-year Extended Fund Facility (EFF) with the International Monetary Fund (IMF) which was approved by the legislature in July 2021. In a 10 February note, international credit ratings agency Fitch estimates that the law could reduce wage-related spending by over 1% of GDP on average over the first five years of implementation. It notes that Costa Rica’s public-sector wage bill accounts for nearly a third of central government spending and absorbs about 40% of central government revenue. The bill, which was approved by 39 legislators, one more than the required threshold, now goes to President Carlos Alvarado for promulgation.

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