Costa Rica Keeps Getting into Debt

The Legislative Assembly approved a $35 million loan from the Inter-American Development Bank to "support the country in the implementation of its fiscal reform program.”

Wednesday, October 2, 2019

At the beginning of July, in the midst of the controversy generated by the recent implementation of fiscal reform in Costa Rica, the approval of a credit to strengthen fiscal sustainability was announced.

According to the Inter-American Development Bank, the resources will be used to support the country in the implementation of its fiscal reform program, aimed at improving the efficiency of public expenditure management (employment and administrative reform), the effectiveness of the macro-fiscal institutional framework and the management of the country's tax system.

You may be interested in "Does Costa Rica Need More Fiscal Measures?"

On October 1 the Assembly reported that "... The deputies approved to be late in their second debate process a series of projects among which is the file Nº 21.535, Approval of the loan contract to finance the program to support fiscal sustainability signed between the Republic of Costa Rica and the Inter-American Development Bank, for an amount of US$ 350.000.000, with a 20-year term, which received the favorable vote of 46 legislators."

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More on this topic

Costa Rica: More Debt to Control Spending?

July 2019

Costa Rica "will strengthen its fiscal sustainability by controlling expenditure and modernizing the tax system with a $350 million loan approved by the Inter-American Development Bank (IDB)."

During the controversy generated by the implementation of the fiscal reform in Costa Rica, the approval of a $350 million credit was announced to "support the country in the implementation of its fiscal reform program."

El Salvador: $200 Million to Finance Public Budget

June 2019

The IDB loan will be used to finance the payment of pensions in general and of the Armed Forces, subsidize electricity, and increase salary scales for police officers and teachers.

The $200 million loan from the Inter-American Development Bank (IDB) has an amortization period of 20 years, a grace period of five and a half years, and an interest rate based on LIBOR, according to the international organization.

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.

El Salvador: $350 million to Cover Fiscal Deficit

June 2018

El Salvador's Congress approved an IDB loan of $350 million to finance the government budget deficit at a 3.25% rate.

The president of the Legislative Assembly, Norman Quijano, stated that " ..." with the conditions offered by the IDB we will have an interest rate estimated at 3.25%, with the bonds we had an average rate of 7 and 8%, the reduction of interests will mean a saving of tens of millions of dollars for the country.' "

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