LatinNews Daily - 21 July 2021

In brief: Costa Rica’s Alvarado hails approval of IMF loan

* Costa Rica’s President Carlos Alvarado has welcomed congress’s final approval of a US$1.78bn loan from the International Monetary Fund (IMF) for the country to address the impact of the coronavirus (Covid-19) pandemic. The 57-member unicameral legislature approved the loan in a second debate on 19 July after approving it in an initial debate at the start of the month. President Alvarado welcomed the vote, describing the agreement with the IMF as an “economic vaccine that would permit us to provide financial stability to the country”. Minister for the presidency Geannina Dinarte explained that the loan would “permit the country to exchange expensive debt for cheap debt”, enabling it to save US$68m in interest and settle US$178m worth of debt with the national social security institute (CCSS). Last year Costa Rica’s GDP shrank by 4.1% as a result of the pandemic and the country posted a fiscal deficit of 8.1% of GDP, and a public debt of 67.5% of GDP. Yesterday Costa Rica’s finance ministry released new figures which show the country’s fiscal deficit to May was ¢744.866bn (US$1.2bn), representing 1.97% of GDP – the lowest of the last ten years as a percentage of GDP. This compares with ¢1.37trn, registered at the same point the previous year, which was equivalent to 3.78% of GDP.