LatinNews Daily - 06 May 2021

In brief: IDB announces loans for Costa Rica

* The Inter-American Development Bank (IDB) has announced two loans for Costa Rica totalling US$500m, which will provide “budget support to the country and support policy reforms to ensure fiscal sustainability and uphold short- and medium-term macroeconomic stability”. According to the IDB, one of the loans includes contingency measures to raise sanitary emergency spending and economic assistance for households and businesses affected by the coronavirus (Covid-19) crisis. It also “contemplates a structural increase in spending on social programmes focused on the most vulnerable communities to reduce poverty and inequality and moves to protect public investment in productive infrastructure”. Meanwhile, the second loan will provide support to “structural reforms aimed at boosting the efficacy of the institutional macro-fiscal framework, increasing the efficiency and progressiveness of the tax system, and improving public spending effectiveness and equity”. The IDB says that “all these measures will contribute to strengthening public finances and fostering solid economic recovery in the post-pandemic stage”. According to the latest report by Costa Rica’s central bank (BCR), the country’s GDP contracted by 4.1% in 2020 as a result of the impact of the pandemic.