A statement from the Ministry of Finance reads:

• Deficit continues to grow despite efforts to control spending and reduce evasion
• Efforts to improve finance and control collections are strengthened

Tax revenues in the first eight months of the year reveal more dynamism in 2012 than last year. In August this year, its growth relative to 2011 was 10.4%, higher than the 9.1% growth seen in August last year.

"So far this year, sales and income tax, with cumulative growth of 12.2% and 13.2% respectively, have driven the increase of more than 10% of the current revenues of the Government, which certainly is good news", said Edgar Ayales, Minister of Finance.

On the other hand, central government expenditure up to August, accelerated slightly, with growth of 10.7%, higher than the 10.2% in the same period of 2011. While this year marks a slowdown in spending on salaries, goods and services and interest, in the areas of current transfers and capital costs there have been dramtic increases. Both items reflect strong growth, reflecting the priorities of this government: major increases in transfers are aimed at the Social Security Department and the education sector, while capital spending seeks to strengthen the educational infrastructure and works by Municipalities. The item of salaries, meanwhile still has controlled growth of 9.1%, lower than that of 2011, after incorporating the latest increases in salaries. '

More on this topic

$2 Billion Deficit in Costa Rica

December 2012

In November, the balance between government revenues and expenditures showed a deficit equivalent to 4% of GDP.

In November the government deficit amounted to $ 1.82 billion, or 4% of the gross domestic product (GDP), the same level as in 2010. Nevertheless, in 2010 the shortfall was lower, at $ 1.52 billion.

El Salvador’s Debt Keeps Increasing

September 2012

"When a government has to borrow money to pay salaries, pensions, gasoline, food, gas subsidies and foreign debt, it is because it is now in a grave situation."

The sluggish display by the Salvadoran economy will not be able to endure the increase in government current expenditure for long.

Fiscal Deficit in Costa Rica Not Lowered

August 2012

In the first 7 months of 2012 revenue increased by 11.3%, but government spending continues to increase at a rate of 9.6% growth, just below the 10.4% recorded in the same period in 2011.

A statement from the Ministry of Finance of Costa Rica reads:

• The fiscal deficit persists despite efforts to increase revenue and reduce expenses.

The Risks of an Uncontrolled Fiscal Deficit

July 2011

Increased public spending in Costa Rica, especially in the payment of wages, has become a threat to the entire economy and should be corrected by cuts or higher taxes.

Overspending in the public sector and in the decentralization of institutions has meant that for the present year, 2011, a higher deficit than ever before in the last ten years has been projected.