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.
The high level of financing and the economic slowdown explain the increase in the fiscal deficit of the central government, which at the end of July reached 3.3% of GDP, the highest in the last six years.
The decrease in tax revenues, due to a slowdown in economic activity, added to the high level of government debt, explained the strong rebound in the fiscal deficit in the first half of the year.Of the total deficit, about two thirds correspond to interest.
The Ministry of Finance in Costa Rica has announced that between today and August 3 it will try to raise, through means of a direct issue in the local stock market, about $879 million.
Authorities reported that two issues of securities will be offered for sale on the Siopel platform of the National Stock Exchange.The first, of $284 million, will have a gross rate of 9% with maturity in 2020, and the second of $595 million, with a gross rate of 10.79% with maturity in 2028.
Between today and February 14 the Ministry of Finance in Costa Rica will go to the local market with the goal of issuing $290 million, at a rate of 7% and maturing in 2019.
In its constant search for fresh resources to meet the interest payments on its growing debt as well as its current expenses, during the next few days the Ministry of Finance will return to the market to try to raise $290 million, through the issue of government debt bonds.
The government is preparing a bill for the Assembly to authorize a debt issue on the international market next year.
The Ministry of Finance is considering raising money abroad in order to avoid pushing interest rates up in the local market.If the Legislative Assembly approves the bill, the government will turn to the international market to raise the 1.2 trillion colones that it needs to pay for domestic debt securities due next year.
Fitch, Moody's and Standard & Poor's are once again warning of the need to generate more revenue and cut public spending in order to avoid "negative consequences for ratings."
On average agencies provide a period of 12-18 months for the fiscal deficit and public debt to stabilize, while clarifying that "... the presentation of tax reforms is not enough to ensure a good perspective for the country.
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 Ministry of Finance has announced that this year they plan to increase their borrowing in the domestic market by 46%.
The Ministry of Finance announced that for the first six months of this year, they plan to increase their borrowing in the domestic market by 46% compared to the same period in 2013 . "... The Central Government is considering issuing a total of $1.8 billion in the first six months of this year."
Debt portfolios formed with the Costa Rica State Bonds, are starting to be affected by the decline in bond prices.
The low prices of the Costa Rican government bonds are causing dissatisfaction among investors, especially among those who have to value their assets at market prices.
For example, a fixed rate certificate maturing in 2015 was offered on January 9th at a price of 99.75 and on 13th February the figure was 95.41, reports Elfinancierocr.co.
Increased public spending in Costa Rica, especially in the payment of wages, has become a threat to the entire economy and should be corrected by cuts or higher taxes.
Overspending in the public sector and in the decentralization of institutions has meant that for the present year, 2011, a higher deficit than ever before in the last ten years has been projected.