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's financial deficit rose from 3.4% of GDP in September 2016 to 4% in the same month this year, explained by an increase in the financial cost of debt and an increase in capital expenditure.
From a statement issued by the Ministry of Finance:
At the end of September, the central government's revenue and expenditure figures reflect the need for comprehensive fiscal reform (via income and expenditure), which will make it possible to sustain the state's finances, as well as stability and continuity of social achievements which the country achieved throughout its history.
Tax revenues went from a rate of change of 7% in March 2016, to a rate of 8.5% in the same month of this year.
From a statement issued by the Ministry of Finance:
Authorities at the Treasury announced the performance of the central government's fiscal figures at the end of the first quarter of the year, which indicate how tax revenues continue to show good results, going from a rate of change of 7% in March 2016 to 8.5% in the same period this year.
In a worst case scenario, debt could climb to 50% of GDP within 2 years.
According to economist Thelmo Vargas, a partner at the consulting firm Ecoanálisis, the forecast is of a base scenario in which interest rates are 5%, the economy grows at a rate of 4% and a primary deficit of 3% is registered for production.
"However, in a scenario with more pessimistic assumptions, Government obligations could grow from 38.7% of GDP expected for 2013 to 50.3% of production in 2015," noted an article in Elfinancierocr.com.
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.