While the budget increases, the Solis administration is requesting World Bank loans to cushion the public debt, transferring the weight of the expenses to future Costa Rican generations.
EDITORIAL
The Ministry of Finance has asked the multilateral technical assistance agency to analyze the country's debt policy and for an additional loan, the amount of which is still unknown, in order to pay part of the interest on the state's current debt.
The country is spending more and more in interest payments for the government's debt, which in 2013 rose to represent 2.6% of GDP.
In 2013 the interest paid by government debts rose by 29%, reaching 2.6 % of Gross Domestic Product (GDP). If the expectations of the Ministry of Finance are correct, the financial situation could become more complicate in 2014, as it is anticipated that this financial obligation would reach 2.9% of GDP.
The rapid growth of debt is not only from the central government but also that of municipalities and state enterprises.
Up to August the balance of the central bank's debt grew by 39% compared to the same period in 2012, followed by municipalities with 23%.
These two are joined by the nonfinancial public entities with 20% and the Central Government with 25%. The figures were revealed by the Ministry of Finance and the Central Bank of Costa Rica.
The country ranks third in Latin America in terms of the difference between income and expenditure in relation to GDP.
In 2012, government revenues totaled 14.4% of GDP while expenditures were 18.8%.
Data from the Economic Commission for Latin America and the Caribbean (ECLAC), reveals that compared with 2007 figures the country shows a significant deterioration .
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