Costa Rica Coffee Guide

President Carlos Alvarado reduces salary in the face of economic crisis

July 16, 2020

The President of Costa Rica, Carlos Alvarado, announced Thursday that he will reduce his salary by 15% in support of his government’s proposal to cut the highest wages in the public sector to alleviate the economic crisis caused by the COVID-19 pandemic.

The president’s announcement came as the Legislative Assembly discussed a government proposal to cut 15% of the government’s highest wages, including those of lawmakers.

“The health pandemic has caused an economic pandemic,” President Alvarado wrote on Twitter. “The country is going through hard times, and that is why the government proposed to reduce the working hours of public employees by 15% for those who earn more than ₡1.5 million [per month].”

He added that “starting today (Thursday) I will voluntarily lower my salary to meet that 15% in total.”

The proposal to cut wages is part of an extraordinary budget the government presented to Congress to meet the demand of the pandemic. It includes a cut in public spending equivalent to 1% of gross domestic product (GDP).

Costa Rica has a delicate fiscal situation aggravated by the pandemic, which in the last month has spread with more force, reaching nearly 9,000 infections and 40 deaths as of Wednesday.

The country accumulated until the end of 2019 a fiscal deficit of 6.96% of GDP. That figure could reach 9.7% of GDP for this year as a result of the pandemic, according to the Ministry of Finance.

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