No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeCosta RicaCosta Rica announces cuts in public spending in the face of pandemic...

Costa Rica announces cuts in public spending in the face of pandemic crisis

The President of Costa Rica, Carlos Alvarado, announced Sunday a sharp cut in public spending as part of the actions to overcome the crisis caused by the COVID-19 pandemic.

The cut will be equivalent to 1% of gross domestic product (GDP), Alvarado said on national radio and television, in which he outlined a road map to deal with the economic impact of the crisis.

The cuts will be presented Monday to the Legislative Assembly (parliament), along with an extraordinary budget, by the Minister of Finance, Elián Villegas.

“It will be the largest cut in public spending in our history,” said the president, who explained that it will include all sectors but won’t affect social programs or large investments in public works.

Alvarado indicated that the government negotiated credits with international financial organizations under favorable conditions, which will allow the government to refinance high-interest debts and alleviate public finances.

Costa Rica accumulated until the end of 2019 a fiscal deficit of 6.96% of GDP, which could reach 9.7% of GDP for this year as a result of the pandemic, according to the Ministry of Finance.

The ministry also projected that public debt will reach 68.8% of GDP this year.

Alvarado assured that with the cut in expenses and the negotiated credits, economic stability will be guaranteed through the end of 2020.

In the following years, economic stability will depend on the legislative approval of a $504 million loan with the International Monetary Fund (IMF), Alvarado argued.

With this loan, the government will be able to negotiate a “stand by” agreement with the IMF, which according to Alvarado is “essential to maintain the country’s economic stability in the coming years.”

Among the possibilities for 2021 is a “solidarity tax” on Costa Rica’s wealthiest, Alvarado said.

Costa Rica, with 5 million inhabitants, has experienced in the last three weeks its highest increase in known cases of COVID-19. On Sunday, the Health Ministry reported 7,596 cumulative infections and 30 deaths.

The government applied new restrictive measures beginning Saturday to prevent the mobilization of people in the areas of greatest contagion.

Watch President Alvarado’s entire address below:

Trending Now

Costa Rica Surf Film Festival Honors ‘Pura Vida Bodysurfing’ with Top Audience Award

Pura Vida Bodysurfing is an award-winning short film that strips surfing back to its essence—riding waves without a surfboard. Filmed across Costa Rica’s legendary...

Prisma Dental in Costa Rica Keeps Customers Happy and Smiling

I am 81 years old and have had teeth removed, bridges, and cavities fixed several times to sustain my ability to eat and function....

Guatemala Offers Asylum to Nicaraguan Migrants Deported by U.S.

Guatemalan President Bernardo Arévalo announced on Friday that his country will grant asylum to Nicaraguan migrants deported by the United States who do not...

Honduras Seizes $2 Million, Gold-Plated Pistols in Drug Raid

Honduran authorities struck a blow against drug cartels, seizing over $2 million in cash, war rifles, and flashy gold-plated pistols in Copán, a northwest...

Why Costa Rica Feels Like a Safe Haven for This Longtime Expat

If someone asked me to sum up why I live in Costa Rica in 5 words or less, my answer could well be: “It...

Costa Rica’s Top Court Bans President Chaves from 2026 Election Campaign

Costa Rica’s Supreme Electoral Tribunal on Thursday barred President Rodrigo Chaves from participating in the 2026 election campaign, ruling that he "illegitimately used" his...
spot_img
Costa Rica Tours
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait
Costa Rica Travel

Latest News from Costa Rica