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Economy & Business - August 2021

ECONOMIC HIGHLIGHTS

COSTA RICA | IMF loan approved. On 19 July Costa Rica’s President Carlos Alvarado welcomed congress’s final approval of a US$1.78bn loan from the International Monetary Fund (IMF) for the country to address the impact of the coronavirus (Covid-19) pandemic. The 57-member unicameral national legislature approved the loan in a second debate on 19 July after voting in favour of it in an initial debate at the start of the month. Minister for the presidency, Geannina Dinarte, said the loan would “permit the country to exchange expensive debt for cheap debt”, enabling it to save US$68m in interest payments and settle US$178m worth of debt with the national social security institute (CCSS). Last year Costa Rica’s GDP shrank by 4.1% due to the coronavirus (Covid-19) pandemic and the country posted a fiscal deficit of 8.1% of GDP, and a public debt of 67.5% of GDP. On 20 July Costa Rica’s finance ministry released new figures which show the country’s fiscal deficit to May was ¢744.866bn (US$1.2bn), representing 1.97% of GDP – the lowest deficit in the last ten years. This compares with ¢1.37trn, registered at the same point in 2020, which was equivalent to 3.78% of GDP.

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