LatinNews Daily - 16 March 2022

In brief: Costa Rica’s gov’t hails more fiscal progress

* Costa Rica’s finance ministry has released new figures which show the country’s fiscal deficit to February 2022 was ¢432.08bn (US$669m) representing 1.01% of GDP and down from the ¢451.18bn registered at the same point in 2021. The same figures show that the country registered a primary surplus of ¢27bn, equivalent to 0.06% of GDP which the finance ministry described as the best primary balance of the last 14 years. In the first two months, public debt was ¢27.23trn (64.79% of GDP) of which 75.34% was domestic debt and 24.66% foreign debt. Finance minister Elian Villegas Valverde hailed the figures, noting this “fiscal responsibility” had been recognised last week on two occasions – firstly with the announcement of a new staff-level agreement with the International Monetary Fund (IMF) with which the country has a three-year US$1.76bn Extended Fund Facility (EFF) arrangement. He also mentioned the decision by international credit ratings agency Fitch to revise up Costa Rica’s outlook to stable from negative, citing “the better-than-expected improvements in the fiscal position and economic activity”. According to Fitch, Costa Rica’s total deficit reached 5.0% in 2021 from 8.0% in 2020. Fitch expects the government will reach a 0.4% of GDP primary surplus in 2022, beating the -0.3% EFF target and that the overall deficit will narrow to 4.5%.

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