The Government is still unable to curb its current account spending, which in 2013 grew by 8% compared to 2012.
Last year, the Salvadoran government used $3,654 million for consumption and operating expenses, $281 million more than in 2012, according to data from Banco Central de Reserva .
"Of the composition of current expenditure in 2013, 37.9% was needed for the payment of public employees, the purchase of goods and services accounted for 17.2% and commitments to public debt accounted for 15.9% of the spending."
In January 2014, current account expenditure increased by almost 8% compared to January 2013, with the category of Remuneration up 11%.
The monthly figures from the Central Government Revenues, Expenditures and Financing report published by the Ministry of Finance of Costa Rica, shows that the increase in total revenues in January 2014 was almost 11%, which meant a reduction in the fiscal deficit financial compared to GDP of 0.7%.
From January to November 2013, the fiscal deficit reached $2.270 billion, 4.6% of the national production, 25% more than that accumulated up to November 2012.
Market Pulse Blog Aldesa:
Costa Rica: How much does the government borrow per day?
Every day operations made by the Government, and therefore by all Costa Ricans, add up to an additional ₡1.796 million of new debt.
Authorities warn that the next administration will inherit a deficit of such a magnitude that it will require high impact decisions.
This was explained by the comptroller Marta Acosta during a session of the Costa Rican Congress where she presented a report on the budget plan for the Republic in 2014. In regards to the "high-impact decisions," she said that public revenue must be increased by $1.798 billion , equivalent to 3.4% of GDP.
In relation to GDP, the expenses of the Costa Rican state are the highest in Central America.
This was revealed by a survey conducted by the Central American Institute for Fiscal Studies (Icefi). Second place is occupied by the Government of Panama with 23% of GDP followed by Guatemala which has one of the lowest with 15.1% of production.
Costa Rica is the only Central American country which plans to increase current spending to a total of 18.6% of GDP, also the highest in the region. "... The tax burden is not enough to fund the standard of living in terms of public service delivery," said Renato Vargas Icefi analyst.
The gap between government revenues and expenditures has increased to represent 3.4% of the country's production, up from 2.9% in August 2012.
This was announced by the chief of Finance, Edgar Ayales. "The accelerated pace of deficit growth is due both to the growth of government expenditure as well as revenue hit by the slowdown in the economy," noted an article in Elfinancierocr.com.
The Central American Institute for Fiscal Studies has highlighted the unsustainability of the fiscal deficit in Costa Rica, El Salvador, Guatemala and Honduras.
Pensalibre.com reports that "... according to the results of a report by the Central Institute for Fiscal Studies (Icefi) submitted yesterday ... Guatemala, El Salvador, Honduras and Costa Rica find themselves with in unsustainable scenarios regarding public debt in the next few years. "
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 .
In light of the downward revision of the forecast for economic growth by the Central Bank, the UCCAEP has reiterated its concern over the high fiscal deficit.
From a statement from the Costa Rican Union of Chambers and Associations of Private Enterprises (UCCAEP):
In relation to the review of the macroeconomic program by the Central Bank of Costa Rica (BCCR) released today UCCAEP states that:
During the first six months of 2013, the Central Government's financial deficit reached $1.154 billion, equivalent to 2.3% of GDP.
From a press release by the Ministry of Finance of Costa Rica:
In June, 2013, primary expenditure, ie total expenditure excluding interest, grew by 8.8%, significantly less than the 11.2% recorded last year. The main elements which contributed to this slowdown were continued control of payroll spending and a slow down on the part of current transfers.
While up to May Finance revenue grew by 10% interannually, Central Government expenditure increased by 13.1%.
"Finance revenue grew by 10% interannually up to May, driven especially by the collection of income tax, tributes which recorded a growth of 11.7% in May," noted an article in Elfinancierocr.com.
"This increase in revenue pales in comparison to the rise of 13.1% in central government spending."
During the first month of 2013 government spending was 16% higher than in January 2012, while income rose by 8.4%.
Crhoy.com reports that "In general, the central government deficit during the first month of the year stood at 0.84% as a proportion of gross domestic product (GDP). Meanwhile, interest expenses increased in the order of 36%, whereas a year earlier it increased in the order of 10.1%. "
In November, the balance between government revenues and expenditures showed a deficit equivalent to 4% of GDP.
In November the government deficit amounted to $ 1.82 billion, or 4% of the gross domestic product (GDP), the same level as in 2010. Nevertheless, in 2010 the shortfall was lower, at $ 1.52 billion. Of the $1.82 billion shortage the government needs to cover its running costs, $1.12 billion were financed with domestic debt and $700 million with external debt.
The increase in government spending in the first eight months of 2012 is even higher than the increase observed in the same period last year.
A statement from the Ministry of Finance reads:
• Deficit continues to grow despite efforts to control spending and reduce evasion
• Efforts to improve finance and control collections are strengthened
Tax revenues in the first eight months of the year reveal more dynamism in 2012 than last year.
In order to alleviate the growing fiscal deficit, the Government has introduced a series of loans for approval by the legislators of the present Legislature, which will change in late April.
El Salvador faces a difficult fiscal situation and low macroeconomic growth, high state debt, deficit increased by excessive public spending and the absence of any agreement with the IMF since late 2011.