Costa Rica: $300 Million More Debt to Face the Crisis

The Central American Bank for Economic Integration approved a line of credit for the country to reinforce its fiscal sustainability and strengthen its macroeconomic stability, in the context of the economic crisis that arose from the outbreak of covid-19.

Friday, July 24, 2020

In this way, Costa Rica becomes the first nation to receive the maximum amount of $250 million per year available for each country under the Development Policy Operations Program (DPO), reported the international organization.

The statement from the Central American Bank for Economic Integration (CABEI) also explains that it is receiving an additional $50 million to attend to the emergency caused by the pandemic within the framework of the Bank's Regional Program for Support and Preparation for Covid-19 and Economic Reactivation.

Elian Villegas, Minister of Finance of Costa Rica, said that "... in the midst of this pandemic that is also attacking the financial health of Costa Rica, the CABEI credit comes to allow us to maintain the domestic market without excessive pressure, so that the savings of Costa Ricans support the effort of economic recovery that must go hand in hand between the Government and private enterprise, so this is a way to collaborate in this national effort, which is imperative at this time for the country."

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More on this topic

Public Finance with Reserved Forecast

August 2020

In this regional context of economic crisis, falling fiscal revenues and increasing public debt, Costa Rica's debt level is expected to rise to 75% of GDP by 2021, and in the case of El Salvador, the indicator could exceed 85%.

The outbreak of covid-19 in Central America forced the government to declare severe household quarantines and to restrict several economic activities, restrictions that in some cases are still in place after five months of health and economic crisis.

El Salvador Issues $1 Billion in Debt

July 2020

On July 8, the Salvadoran government issued $1 billion in bonds on the international market at a 9.5% interest rate with a maturity date of 2052.

The resources collected through this international issue are part of the $3 billion debt issuance authorized by the government and will be used to finance the health and economic crisis resulting from the spread of the Covid-19.

Costa Rica: $500 Million to Address Covid-19 Crisis

March 2020

The Costa Rican Assembly approved in second debate a credit with the Latin American Development Bank, which will be used to assist people who lose their jobs, as well as employers and independent workers.

The funds from the $500 million loan from the Andean Development Cooperation, which was originally planned to be used for debt repayment, will be used to finance the Costa Rican government's response to the national emergency caused by the Covid-19 virus, the Legislative Assembly reported.

Costa Rican Government Keeps Going into Debt

April 2019

The Andean Development Corporation approved a $500 million loan to the government of Costa Rica, which will be used to "achieve fiscal sustainability in the short and medium term.”

The Andean Development Corporation (CAF) reported that these resources will be used to obtain the benefits generated by the implementation of the Law to Strengthen Public Finances and Costa Rica's access to international markets.

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