Central America Fiscal Outlook - November 2015

While the Northern Triangle countries strive to reduce or at least maintain constant levels of debt / GDP, Costa Rica and Panama move further away from fiscal discipline, the former at the greatest pace.

Wednesday, November 25, 2015

From the introduction of a report entitled "Macrofiscal Profiles : 4th Edition." by the Central American Institute for Fiscal Studies (Icefi):

In the area of prioritizing economic stability over the availability of resources to finance development, the countries of the northern triangle in Central America, have generally shown a significant effort to reduce or at least maintain constant levels are Debt / GDP and the fiscal deficit, which means that, tacitly, the fiscal rule of zero growth of public debt is being used, despite the impact this may have on the welfare of the people.

Read full report by Icefi (in spanish).

More on this topic

Costa Rica: Fiscal Deficit Closes 2016 at 5.2% of GDP

January 2017

In comparison to 2015 revenue grew by 9% and expenses by 6%, and total public debt as a proportion of GDP reached 45%.

From a statement issued by the Ministry of Finance:

The figures for income and expenditure of the central government indicate that by the end 2016, the shortfall of government revenue to cover expenses was 5.2% of GDP, less than the 6% calculated at the beginning of the year and less than the amount that was observed in 2015 (5.7%). This result represents a reduction of 2% (equivalent to ¢32 billion) from the deficit of 2015, which makes it the lowest deficit in the last four years.

Costa Rica: Fiscal Deficit Reaches 4.8% of GDP

November 2015

State expenditures continue to exceed tax revenues while the government cries out for legislative approval of the proposed tax reform.

In October, total revenues amounted to ¢3,241,326 million ($6,047 million), recording a variation of 8.5%, while total expenditures reached ¢4,589,189 million ($8.561 billion), growing 9.6% compared to the same period in 2014.

Poor Prognosis for Public Finances in Costa Rica

September 2013

The Finance Minister himself described the Costa Rican financial situation as "fragile and unsustainable" .

An editorial in Elfinancierocr.com notes that "In the next few months Ayales's management in light of public finances will be very difficult for four reasons."

Among these reasons is the electoral political situation, which ensures an increase in public spending because of the need to complete at least some projects before the end of the current term, and especially because of the actions of pressure groups demanding government concessions.

El Salvador: Tax Efforts are Insufficient

November 2012

Fitch notes that the Salvadoran government’s efforts to achieve a consolidation of its fiscal deficit are insufficient and are threatened by a weak economic outlook.

In a special report, Fitch Ratings said that El Salvador is making progress towards fiscal consolidation, but the momentum may be insufficient, given the poor prospects for economic growth.

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