Costa Rica: Fiscal Deficit In June is 2.3% of GDP

During the first six months of 2013, the Central Government's financial deficit reached $1.154 billion, equivalent to 2.3% of GDP.

Thursday, July 18, 2013

From a press release by the Ministry of Finance of Costa Rica:

In June, 2013, primary expenditure, ie total expenditure excluding interest, grew by 8.8%, significantly less than the 11.2% recorded last year. The main elements which contributed to this slowdown were continued control of payroll spending and a slow down on the part of current transfers.

Meanwhile, interest expense increased by 24% compared with 5% in the first half of last year. This behavior caused the Central Government's total expenditure to register a growth rate of 10.6% (slightly higher than the 10.4% observed last June).

"The high interest rates observed during the first half of 2012 and the steady increase in public debt produced higher interest expense in the first half of 2013. The cost of acquisition of the Central Government has been reduced significantly since then and this will slow the interest expense at the end of this year or early next year. However, with the continued growth of public debt and the possible increase in international interest rates in the next few years, increased interest expense is almost inevitable in the medium term, and there is a clear need to find a solution to the fiscal deficit," said Finance Minister/1} José Luis Araya.

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