LatinNews Daily - 03 March 2021

In brief: IMF approves Costa Rica loan programme

* The Executive Board of the International Monetary Fund (IMF) has approved a US$1.78bn 36-month extended financial assistance arrangement under the Extended Fund Facility (EFF) for Costa Rica to address the impact of the coronavirus (Covid-19) pandemic. The United Nations Economic Commission for Latin America & the Caribbean (Eclac) forecast in December that Costa Rica's GDP would shrink 4.8% in 2020. The Board’s approval allows for an immediate disbursement equivalent to US$296.5m. The EFF arrangement follows Fund emergency support to Costa Rica in April 2020 equivalent to US$521.7m. The arrangement is expected to catalyse additional bilateral and multilateral financial support. The announcement follows a preliminary deal announced by the IMF and the government led by President Carlos Alvarado in January. According to the IMF, the home-grown programme supported by the IMF “focuses on implementing equitable fiscal reforms to ensure debt sustainability, while protecting the most vulnerable”. The deal remains contentious domestically and has been rejected by unions like the Asociación Nacional de Empleados Públicos y Privados (Anep), and protest group Movimiento Rescate Nacional (MRN), who say it is not necessary.