Costa Rica: Public Budget Reduced in 2020

The Alvarado administration presented to the Legislative Assembly the draft public budget for 2020, which will be 4.3% lower than 2019, thus representing the largest spending reduction in recent years.

Friday, August 30, 2019

A decrease in current spending, as well as a decrease in public sector institution positions and salaries, allowed the central government budget for 2020 to be lower than this year's, the Assembly reported.

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From the Legislative Assembly statement:

August 30, 2019. For next year, the Ministry of Finance included 10.5 billion colones in the draft budget delivered this Friday by Finance Minister Rocío Aguilar Montoya to the Legislative Assembly, 466.7 billion less than this year.

The changes that allow the budget reduction, explained Finance Minister Rocío Aguilar, by delivering the document to the President in Office of the Legislative Assembly Zoila Volio Pacheco and the president of the Finance Commission Ana Lucia Delgado Orozco. The leader explained that they are the product of expenditure containment and fiscal reform.

The head of the Treasury highlighted as positive data in the 2020 budget, the increase of 16.1% in capital spending over 2019, which allows investment in public works. Another positive aspect of next year's budget according to the owner of the treasury is that the form of financing is reversed because current revenues will cover 52% and the remaining 48% will require the issuance of bonds.

The increase in current revenues is the result of a 6.3% increase in tax revenues due to the changes contained in the tax reform. Despite the progress achieved with the fiscal reform, the Minister of Finance stated that at the moment the payment of debt service continues to be the item that monopolizes the largest percentage of resources of the budget with 38.2% followed by the Ministry of Education with 25.4% and pension systems with 10.7%, these three consume more than 74% of the national budget.

Congresswoman Ana Lucía Delgado Orozco, President of the Tax Affairs Commission, where the budget will be processed, said that the project should be a more transparent, accurate and austere financial management instrument. She added that it should not be just an accounting instrument with a short or no long-term vision, so the processing of the bill, she said, will be very thorough to comply with the content of the law strengthening public finances and containment of expenditure Audio Deputy, Ana Lucia Delgado Orozco.



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