In a new effort to avoid abrupt increases in the exchange rate, the Central Bank has announced that it will now be able to sell more dollars directly to public institutions.
So far the Central Bank has had to respect the limit of 8% of the average balance of the Net International Reserves in direct sales of dollars to public sector entities.The Central Bank decided to eliminate this limit in order to be able to sell them the dollars that they require and thereby avoidturning to the wholesale Monex market to buy them from financial entities
In the first three months of the year imports totaled $3.679 billion, 18% less than the same period in 2014, due to falling oil prices and lower demand for raw materials for industry.
The reduction in purchases of inputs for the electrical and electronics industry, plus the decline in the oil bill are the main factors accounting for this drop in national imports.
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.
Despite the restriction by the central banking system which has caused a general credit contraction, consumer loans have grown by 22%.
According to data from the Superintendent of Financial Institutions (Sugef), these activities are maintaining an upward trend, despite a slowdown in the national economy. "The growth in both sectors is important because they are together as a whole, 40% of the total credit granted by banks", reported Nacion.com.
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.
Now is not the time to be spending, it is time to save; however, variations in interest rates and inflation make it difficult to decide whether to save on a short or long term plan.
Andrés Volio, a finance expert, and Alberto Franco y Roberto Venegas, both economists, give suggestions on this topic in an article published by Edgar Delgado on Elfinancierocr.com
A high purchasing power and demand for goods and services is attracting big competitors such as the Salvadoran Siman Group which inaugurated a 11,000 m2 store.
A market that was once characterized by competition between local stores such as La Gloria, Yamuni and LLobet on the national level has turned into a regional dispute with the arrival of the international department store chains.
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