Costa Rica: Cost of Debt Up 29%

The country is spending more and more in interest payments for the government's debt, which in 2013 rose to represent 2.6% of GDP.  

Tuesday, February 11, 2014

In 2013 the interest paid by government debts rose by 29%, reaching 2.6 % of Gross Domestic Product (GDP). If the expectations of the Ministry of Finance are correct, the financial situation could become more complicate in 2014, as it is anticipated that this financial obligation would reach 2.9% of GDP.

"The bulk of the interest paid last year was on domestic debt, ie obligations to Costa Rica and corresponded to 9% of the total. Government domestic debt consists mainly of emissions of Treasury bonds in dollars and colones."

" ... The increase in the burden of interest payments on the economy and on state expenditures is due to the fact that they are paying for the highest rates they had years ago," said economist Fernando Rodriguez.

"The problem is compounded because on top of this burden of interest you have to factor in a growing deficit which requires more loans to pay for it. In the end, a larger amount of debt has a snowball effect which will eventually accelerate a growth in interest rates. "

"The placement of bonds in international markets can make the cost of borrowing lower but even so we will see a growing level of interest payments as long as the fiscal deficit remains high," said economist Edna Camacho









this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423


More on this topic

Honduras: Public Debt Stands at 41% of GDP

October 2014

Between January and September this year, the amount of state debt increased by 7.7% compared to the same period in 2013, raising the total amount to $5.065 billion.

Of the total debt, 64% was purchased with multilateral financial loans, 21% with private creditors and 11% with bilateral organizations, says a report by the Ministry of Finance of Honduras.

El Salvador: Public Debt Reaches 60% of GDP

February 2014

The government continues to spend more than what it collects, increasing the total public debt, which in 2013 exceeded $14 billion.

The balance of the total public debt of El Salvador, which includes the debt of financial and nonfinancial public entities amounted to $14.8882 billion, an increase of 2.7% compared to the previous year.

In 2015 Costa Rica's Debt Will be 45% of GDP

April 2013

In a worst case scenario, debt could climb to 50% of GDP within 2 years.

According to economist Thelmo Vargas, a partner at the consulting firm Ecoanálisis, the forecast is of a base scenario in which interest rates are 5%, the economy grows at a rate of 4% and a primary deficit of 3% is registered for production.

Costa Rica's Fiscal Deficit: Official Projection Falls Short

March 2013

Costa Rica could have a greater fiscal deficit than the 4.8% estimated by the Central Bank for this year, reaching 5.1% of GDP.

According to the Fiscal Studies Program by the School of Economics at the National University of Costa Rica, this projection was based on total tax revenues increasing by 8.7%, taking into account a lower tax income and Customs taxes (due to a fall in imports) and also an increase in total expenditure of 11.5%.