Costa Rica: Public Finances Deteriorate Further

The high level of financing and the economic slowdown explain the increase in the fiscal deficit of the central government, which at the end of July reached 3.3% of GDP, the highest in the last six years.

Tuesday, August 21, 2018

The decrease in tax revenues, due to a slowdown in economic activity, added to the high level of government debt, explained the strong rebound in the fiscal deficit in the first half of the year. Of the total deficit, about two thirds correspond to interest. 

From a statement issued by the Ministry of Finance:

As of July 2018, the fiscal reform has become more relevant, because at the end of this month the fiscal deficit (difference between total revenues and total expenses) of the Central Government was 3.3% of the Gross Domestic Product (GDP), the highest in the last six years. 

 Although for this period the expenditure figures show a deceleration with respect to the same period last year, this is not reflected in the financial deficit, due to the fact that tax revenues have a slower growth rate than that observed last year.

Read full statement (in Spanish).

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More on this topic

Costa Rica: Tax Figures up to February 2017

March 2017

As of February total expenditures recorded a slowdown of 1%, having increased by 6.8% compared to the 7.8% increase in the same period in 2016.

From a statement issued by the Ministry of Finance:

The First Vice President and the Minister of Finance, Fallas Helio, presented this week the tax figures at the end of February 2017, which show that both the primary deficit (total revenue less noninterest expense) as well as the financial deficit maintain the same behavior seen in February last year, 0.8% of GDP and 1% of GDP respectively.

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 Figures - September 2016

October 2016

Although the growth rate of government expenditure has slowed, it is above inflation, while rising incomes have allowed for a reduction of the fiscal deficit compared to last year.

From a statement issued by the Ministry of Finance:

A reduction of ¢168,742 million in the financial deficit (revenues minus expenses), and a difference of seven percentage points between increased income and expenses, are the fiscal figures for the Central Government recorded with just three months to go until the end of the year.

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%.

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