Costa Rican Government Keeps Going into Debt

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.”

Tuesday, April 16, 2019

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.

The announcement of this new loan is one month after the Costa Rican Ministry of Finance reported that through an extraordinary auction, it placed $475 million in domestic debt securities in the local market.

See “Costa Rica: Government Issues $475 Million in Debt” and "More Debt, But with Economic Recovery".

From the CAF statement:

This loan will meet the country's short-term financing needs while consolidating the implementation of the Law to Strengthen Public Finances.

In order to contribute to the efforts being made by the Government of Costa Rica to consolidate a public policy that will guarantee long-term fiscal sustainability through improved management of the tax system and more efficient public spending, the Board of Directors of CAF, a Latin American development bank, approved a USD 500 million loan.

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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."

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Costa Rica: State Debt Keeps Growing

May 2019

The Andean Development Corporation approved a $500 million loan for the government, which will be used to "cover the needs contemplated in the 2019 Regular Budget."

The terms of the loan are at 6 months plus a margin of 1.85% at an annual Libor rate of 18 years from the effective date of the loan agreement.

Ambitious Plan for External Debt

November 2018

In Costa Rica, the Alvarado administration will ask the Congress for authorization to issue Eurobonds in international markets for at least $5 billion.

The Finance Minister, Rocío Aguilar, reported on November 20 that the country's public debt plans include the possibility of attracting more resources in the international market. One of the alternatives would be to place $5 billion in the next four years.

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