Costa Rica to Finance 45% of its Budget with Loans

Uncertainty about approval of the tax package in the National Assembly makes the national debt situation unsustainable.

Friday, September 2, 2011

The General Budget of the Republic for the Fiscal Year 2012 was presented by Finance Minister Fernando Herrero, who admitted that 45% of the $11,500 million to be financed will be provided by issuing public debt.

The 2012 budget predicts that the pace of spending growth will slow down going to 9.3% from 20% in 2010.

The basic structure of the budget means that 29% of the expenditures will go towards paying salaries of state officials, 28% for transfers to public institutions such as universities, 25% to repay debt and 9% to pay the interest generated on debt.

According to an article in Elfinancierocr.com, the minister Herrero when presenting the Budget, said that "the budget gives priority to the main areas of the National Development Plan introduced by President Laura Chinchilla, among which are, the Ministry of Health whose budget rose by 61%, funding for public safety, up by 11%, the budget for public education will reach 7% of GDP in 2012, while capital spending will grow by 18% compared to 2011. "

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