Costa Rica plans to invest $880 million to face coronavirus impact

Costa Rica presented to its Legislative Assembly on Wednesday an investment plan for $880 million to support citizens who have lost their income due to the coronavirus and to maintain the payment of public debt.

Finance Minister Rodrigo Chaves disclosed the investments by sending the Legislative Assembly an extraordinary budget to address the economic emergency caused by measures to contain the spread of COVID-19.

“Through this extraordinary budget, we are meeting two imperative needs: supporting Costa Rican families who have unfortunately lost their income, and honoring the country’s debt,” Chaves said at a conference conference call.

He announced that, as the health and economic crisis progresses, the government will analyze the need to present new budgets, within the fiscal tightness facing the country.

Costa Rica carries a fiscal deficit of 6% of GDP and, to face it, launched a fiscal reform in 2018 that includes tax increases and cuts in public spending.

This situation left the government with little room to maneuver in the face of the global crisis caused by the new coronavirus. Like many countries, Costa Rica has adopted measures of social distancing that have strongly impacted the economy.

The extraordinary budget would allocate some $482 million to attend to people who were left without income or with reduced income due to the health emergency.

Another $4 million would reinforce the Health Ministry, while $394 million would cover the service of public debt.

President Carlos Alvarado said that “even with the fiscal tightness that the country is going through, the government has as a priority to attend to the needs of the population.”

At the same time, he assured, that he will maintain the “commitment to fiscal responsibility.”