Costa Rica: Strong Increase in the Financial Deficit

The financial deficit up to October 2017 reached 4.6% of GDP, above the 3.9% registered at October 2016.

Tuesday, November 21, 2017

From a statement issued by the Ministry of Finance:

The fiscal results up to October show the urgent need to have an integral tax reform (via income and expenses), that allows for sustainability in state finances, as well as guaranteeing its operation. Therefore, in order to provide a structural solution to the fiscal problem and reverse the trend of these results, the Government recently presented a new Project for Strengthening Public Finances, which seeks to bring political positions closer to reaching a consensus that will allow for an agreement to be made to clean up the Central Government's economic situation.

The financial deficit as of October 2017 is 4.6% of GDP, while the primary deficit is 2.0%.  At the same time last year, these indicators stood at 3.4% and 1.3%, respectively.  The increase in the deficit is explained by an increase in the financial cost of the debt (interest goes from 2.3% to 2.6% of GDP from October 2016 to October 2017), the increase in capital expenditure (passes from 0.9% to 1.1% of GDP) and transfers that must be complied with under legal mandates (increase from 6.1% to 6.2% of GDP). Remuneration, on the other hand, shows a slowdown, going from 5.5% of GDP in October 2016 to 5.4% in the same month in 2017.

Read full release (in Spanish).

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Costa Rica: Fiscal Figures Deteriorate

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Up to November 2017, the accumulated interest balance reached 2.8% of GDP, compared to 2.4% of GDP the same time last year.

From a statement issued by the Ministry of Finance:

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Costa Rica: Fiscal Figures up to September 2017

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The government's financial deficit rose from 3.4% of GDP in September 2016 to 4% in the same month this year, explained by an increase in the financial cost of debt and an increase in capital expenditure.

From a statement issued by the Ministry of Finance:

Costa Rica: Fiscal Figures - September 2016

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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.