Costa Rica announced on Friday loans for $1.5 billion to support companies from all sectors, along with a $5.45 billion investment in infrastructure to relaunch the economy, which has been hit hard by the COVID-19 pandemic.
The credit resources of the financial system, especially the state bank, will be granted to all productive sectors — including industry, commerce, tourism and culture — as seed capital for new ventures or business reopening, explained the Minister of Planning, Pilar Garrido.
“It is working capital to start again and dream big,” Garrido said about the financial resources that Costa Rica hopes will relaunch the sectors paralyzed by the measures to contain the new coronavirus.
Costa Rica’s economy will experience a 3.6% contraction instead of a 2.5% expansion this year as expected before the pandemic, according to the Central Bank (BCCR).
Likewise, the fiscal deficit will reach 8.6% of GDP for this year, up from an initial forecast of 6.2% of GDP, according to the Ministry of Finance.
Along with productive loans, the government expects to invest $5.45 billion in infrastructure projects, with a portfolio that includes highways, an urban electric train, and the construction and renovation of schools and hospitals.
President Carlos Alvarado indicated that many of the works — which had been planned before the coronavirus crisis — are already underway and that together they can generate 109,000 direct jobs.
The announcement came at a time when the unemployment rate in the first quarter of the year rose to 12.5%, the highest figure in a decade. The calculation does not include the full impact of the pandemic, so it current figure could be even higher.
The package of measures to face the economic challenges caused by the coronavirus also includes simplification of procedures for companies, support to the productivity of micro, small- and medium-sized companies, and an effort to attract new private investments.
Costa Rica plans to grow industrial hemp, wants to attract more wealthy retirees, and hopes its response to the coronavirus expands the market for jobs in science and health technology, Garrido said.
Alvarado announced that on Monday the government will announce measures to gradually reopen the country, which currently has restrictions on much of its economic activity as a result of the pandemic.
Costa Rica has been identified among the most successful countries in containing the new coronavirus, averaging fewer than 10 new infections per day over the last month.
The country has registered 773 cumulative cases of COVID-19, with six deaths and 461 recoveries.