The private sector has denounced the government for not convening in the Legislative Assembly bills related to public employment that would eliminate some of the privileges given to public servants.
From a statement issued by the UCCAEP:
December 5, 2016.The Costa Rican Union of Chambers and Associations of Private Enterprises (UCCAEP), is denouncing the government because of the lack of projects related to public employment in the call records drawn up by the executive branch, for special sessions of the Legislature.
Of the $100 million in debt that the government intended to place on the local market, offers were received for only $1 million.
The government was not able to place all of the debt securities it intended to, only managing to capture the interest of one bank, which bought $1 million in debt at a one year term and with an interest rate of 6.5%.
The Ministry of Finance will be attempting to raise funds in the international and local market in order to improve the public debt profile.
The endorsement by the Congress will allow the Ministry of Finance to extend the term and reduce the cost of part of the public debt.The amount authorized amounts to $891 million and the Ministry of Finance plans to use the local and international markets to renegotiate.
The "Trump effect", added to the upward pressure caused by inflation in US interest rates, explains the upward trend in the performance of Costa Rican bonds and the fall in their price.
A resumption of the upward trend seen in debt securities traded on the international market could make it difficult for the government access external financing, in a context in which most bonds from emerging market countries are experiencing the same situation.If the government decides to resort to financing in the international market, the cost of doing so would be higher if bond yields continue to rise.
Treasury debt securities were issued in Quetzales for an eight year term and with a rate of 6.35%.
From a statement issued by the Ministry of Finance:
The results of the placement of Treasury Bonds on November 22, 2016, are as follows: demand was received for Q.825.1 million, of which 100.0% corresponded to the maturity date of18/11/2024. This time Q.250.0 million was issued, ie 30.3% of demand, at a cut off price of 102.4757 and cut off rate of 6.3500%.The total issued to date amounts to Q14,493.46 million, leaving Q467.39 millionavailable for issue for the fiscal year 2016.
As of October 2016 revenue grew by 8.9% and growth of current expenditure decreased from 7.5% in October 2015 to 3.2% in the same month this year.
From a statement issued by the Ministry of Finance:
A fiscal deficit, accumulated up to October, of 3.9% of GDP and an increase of 5.3 percentage points of income over expenditure, were the results of the central governments fiscal figures at the end of that month.
The government and the opposition have finally reached an agreement and approved the Fiscal Responsibility Law along with the issuance of $550 million in debt securities.
The issuance authorized by the Assembly may be made on the international or local market, and funds will be used to pay principal and interest on short-term debt, budget support and strengthening of the Fiscal Fund at the General Treasury of the Republic.
The government and the opposition have agreed to approve in the first instance an issue of $550 million, not $1.2 billion as claimed by the administration of Sanchez Ceren.
Although the government insists that there is a need is to issue $1.2 billion to cover short - term debts and solve the liquidity problem it is facing, this first agreement to issue $550 million will serve to"... pay for the electricity subsidy for FODES and the mayoral districts."
The non financial public sector deficit was $911 million, equivalent to 1.7% of GDP, improving the position by $103 million compared to 2015.
From a statement issued by the Ministry of Economy and Finance:
The Minister of Economy and Finance (MEF), Dulcidio De La Guardia, presented today at a press conference the results of the Central Government and Non-Financial Public Sector (NFPS) Fiscal Balance for the third quarter of 2016.
Arguing a significant increase in liquidity risk and political divisions that are preventing approval of an issuance of long-term debt, the rating agency has downgraded the rating and changed the outlook to negative.
From a press release issued by Moody's:
New York, November 07, 2016 -- Moody's Investors Service has today downgraded El Salvador's issuer and long-term debt ratings to B3 from B1 and assigned a negative outlook to the ratings, concluding the review for possible downgrade initiated on 11 August.
The institution highlights the restoration of macroeconomic stability, reduction of the fiscal deficit and the rate at which credit to the private sector is increasing.
From a press release issued by the IMF:
On October 26, 2016, the Executive Board of the International Monetary Fund (IMF) completed the combined third and fourth reviews of Honduras’ performance under an economic program supported by a three-year Stand-By Arrangement (SBA) and a two-year arrangement under the Stand-By Credit Facility (SCF). This blended program was approved on December 3, 2014 in the amount of about US$188.6 million (SDR 129.5 million), the equivalent of 100 percent of Honduras’ quota in the IMF at that time (see Press Release No. 14/545).
Standard & Poor's has changed the rating on the outlook from stable to negative, noting that "the reduction in public investment and rising poverty reflect the government's inability to achieve sustainable growth in the long term."
From a press release by Standard & Poor's:
Declining public investment in infrastructure and stagnant general government revenues will continue constraining Guatemala's GDP growth potential and exerting pressure on its debt service.
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