• Costa Rica Coffee Guide

Costa Rica reached in 2019 its worst fiscal deficit in decades

January 29, 2020

Costa Rica’s fiscal deficit reached 6.96% of GDP in 2019, the highest of the last three decades, the Ministry of Finance reported Wednesday.

The result exceeded the official forecast of the Central Bank of 6.2% of GDP by the end of 2019.

The figure comes despite the fact that Costa Rica adopted a tax reform at the end of 2018 that included tax increases to address the deficit.

The Minister of Finance, Rodrigo Chaves, explained at a press conference that the deficit grew more than expected due to the payment of interest on the public debt to meet government expenses.

“In a country that collects 13% of GDP in taxes, 49% of what the State collects goes in interest payments. It is essential to exchange expensive debt for cheap debt,” Chaves said.

Following the approval of the tax reform, the government asked the Legislative Assembly (parliament) for authorization to issue $6 billion in Eurobonds, but the legislators only approved $1.5 billion.

The minister said that he will ask the Legislative Assembly for a new authorization for the remaining $4.5 billion, which would allow Costa Rica to save significantly with lower interest payments.

In addition, the minister said the government will intensify the fight against tax evasion to help reduce the gap in government accounts.

You may be interested

Official communication: Costa Rica’s land borders remain closed
Costa Rica
2789 views
Costa Rica
2789 views

Official communication: Costa Rica’s land borders remain closed

The Tico Times - February 26, 2021

As we first reported earlier this week, Costa Rica's land borders will remain restricted until at least April. Throughout March,…

Amazon Web Services opens new Costa Rica office
Costa Rica
3512 views
Costa Rica
3512 views

Amazon Web Services opens new Costa Rica office

Alejandro Zúñiga - February 25, 2021

Amazon Web Services, a subsidiary of Amazon.com, Inc., on Thursday opened a new office in Costa Rica to support the…

Costa Rica aims for urban natural parks to improve wellness in cities
Costa Rica
2607 views
Costa Rica
2607 views

Costa Rica aims for urban natural parks to improve wellness in cities

The Tico Times - February 25, 2021

The Costa Rican government this week issued a decree creating a new type of park within the framework of the…