Debt Market: Plans in Costa Rica

In addition to the $1,750 million that the government is seeking to obtain through the loan it is negotiating with the IMF, during the four years between 2022 and 2025 the country plans to place $4,000 million in foreign debt bonds.

Monday, March 1, 2021

Currently, the Assembly is discussing the loan file requested to the International Monetary Fund (IMF), which amounts to $1,750 million that will be used to mitigate the fiscal impact caused by the economic crisis resulting from the outbreak of covid-19.

In addition to this multi-million-dollar amount, the government plans to place $4 billion of foreign debt in the international market. According to the authorities of the Ministry of Finance, it is expected that between 2022 and 2025, $1 billion will be allocated each year.

Elian Villegas, head of the Ministry of Finance, told Crhoy.com that with the $4 billion, "... the intention is to contemplate the financing plan for the next years, which among other things includes the eventual funds that the country will receive from the $1.75 billion loan with the IMF."

The article adds that "... for this 2021, the government has financing needs that reach 13.5% of the Gross Domestic Product. Until the end of February, it was estimated that about 10.7% remains to be financed."

Check out the "System for monitoring markets and economic situation in the countries of Central America", prepared by CentralAmericaData.



More on this topic

Fiscal Crisis: Less Spending and More Information

January 2021

Given the agreement reached by the Alvarado administration and the IMF for Costa Rica to access a $1.75 billion loan, the business sector is calling for a reduction in public spending and for detailed information on the scope of the agreement signed by both parties.

In an attempt to ease the fiscal and economic crisis the country is going through, last year the Alvarado administration began negotiations to access a loan for $1.75 billion to be requested from the International Monetary Fund (IMF).

Costa Rica Postpones Eurobonds to 2021

March 2020

Treasury authorities announced that plans for this year are to negotiate with the Legislative Assembly for approval to issue debt in the international market, and if approved, the issuance would take place in 2021.

Last year the executive branch's plans were to issue $6 billion in Eurobonds, but the Legislative Assembly approved the issuance of only $1.5 billion, arguing that the amount proposed at the beginning was too high.

Approval to Issue Eurobonds

July 2019

The Legislative Assembly of Costa Rica approved in second debate the bill that authorizes the government to issue up to $1.5 billion in bonds in the international market.

The Ministry of Finance (MH) reported that with the approval of Bill No. 21.201, which was made on July 16 as planned, the Executive is authorized to administer, issue and manage financing operations in the international market up to an amount of $1.5 billion (one thousand five hundred million U.S. dollars), during the following year after the law was approved.

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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