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LatinNews Daily - 05 December 2022

In brief: Costa Rica claims fiscal deficit progress

*Costa Rica’s finance ministry has released new figures which show that as of October 2022, the country’s deficit was ¢798.0bn (US$1.3bn), equivalent to 1.8% of GDP. This is a reduction of 2.0 percentage points compared with the same period in 2021 when it came in at 3.8% of GDP. The government led by President Rodrigo Chaves claims that the figure is the lowest since 2013. According to the same figures, interest payments on central government debt, which are equivalent to 4.1% of GDP, are a major cause of the country’s negative fiscal balance. According to the same figures, the central government debt reached ¢28.2trn (US$45.5bn) (or 63.1% of GDP) although this is still below the target agreed with the International Monetary Fund (IMF) for December 2022. As regards the composition of debt, 74.3% is domestic debt and 25.7% foreign debt. Highlighting that the country was on track to meet its IMF-agreed debt target, Finance Minister Nogui Acosta Jaén also welcomed the legislature’s recent approval of US$5bn in Eurobonds as a sign that the country was heading in the correct direction, in terms of strengthening public debt management. In 2021, under the previous government led by former president Carlos Alvarado (2018-2022), the IMF agreed an Extended Fund Facility (EFF) arrangement for Costa Rica worth US$1.78bn.

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