LatinNews Daily - 27 June 2023

In brief: IMF hails Costa Rica progress, announces new funds

* The International Monetary Fund (IMF) executive board has concluded the fourth review under the Extended Fund Facility (EFF) for Costa Rica, a three-year US$1.78bn extended arrangement approved in March 2021, allowing for a disbursement equivalent to about US$275m. The IMF also announced that its executive board had concluded the first review under Costa Rica’s Resilience and Sustainability Facility (RSF) arrangement, making available about US$246m in support of Costa Rica’s climate change agenda. An IMF statement notes that the authorities continue to make “important progress” on Costa Rica’s economic reform agenda – echoing recent claims made by the centre-right government led by President Rodrigo Chaves. According to the IMF statement “fiscal targets were met by large margins, further strengthening debt sustainability.” It adds thatgoing forward, the overall policy stance should remain focused on durably bringing inflation back to target and keeping public debt on a firm downward path, while advancing reforms to achieve green, dynamic and inclusive growth”. The IMF is forecasting that Costa Rica’s GDP will grow 3.0% in 2023, down from 4.3% in 2022 and that inflation will close this year at 1.9% down from 8.3% in 2022. It forecasts external debt will come in at 47.5% in 2023 down from 52.4% in 2022 and central government debt will come in at 62.4% in 2023, down from 63.8% last year.

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