Carlos Alvarado reminds deputies that all are passengers in the exercise of power

Carlos Alvarado, President of the Republic, reminded the deputies that both he and they are close to leaving their positions, next May, for which he urged them to reflect on the need to adjust public finances through the agenda agreed with the International Monetary Fund (IMF).

Almost a year after the agreement was signed, the Legislative Assembly went to the end of the year recess without having approved the projects to balance the treasury. The only one that was endorsed in the first debate is the reform of public employment; others, such as global income, have not been ruled in commission and the elimination of exemptions was rejected.

The IMF agreed to give the country two more months to carry out the projects. Otherwise, the second disbursement of the loan of $ 1,778 million will be evaluated in June 2022, after the change of power.

“Both they and I are passengers and we will leave in May, but today we have the opportunity to make a difference for Costa Rica; difference for the next government to enter with the ground leveled. I am hopeful that the agenda will be concluded within this timeframe set by the IMF, ”said the president.

Rodrigo Cubero, president of the Central Bank of Costa Rica (BCCR), said in an interview with The nation that, thanks to the improvement in the economic and fiscal figures this year, the adjustment goal was reduced and could be 1% of the gross domestic product (GDP) or less.

“What we are putting on the agenda with the Monetary Fund will be very good for the country; So, yes, I am very optimistic.

“With that optimism, I am going to continue in the same line that I have followed consistently, it is a line that is not going to change,” Alvarado explained.

According to the president, he is also very grateful for the approval of the two loans with the Inter-American Development Bank (IDB) for $ 500 million,

“My message at this time to the deputies is one of gratitude, because this year has been a year of important progress, of important reforms, I thank you very much because without the deputies this would not be a reality.

“We have made progress, we made progress with the IDB loan, when we believed it was not going to happen; that does not finance this government; IDB credit finances the next government, that’s good.

“The rating from Moody’s (risk rating agency that improved the country’s credit outlook) is good for Costa Rica and will be good for financing the next government,” added the president.

The IDB loans for $ 500 million will be used to cover the budget and finance the emergency due to the covid-19 pandemic.

Each of the loans is for $ 250 million. One of them is a complement to the fiscal adjustment program agreed with the IMF, with a seven-year amortization period, a three-year grace period and an annual rate of 2.34%.

The other loan is part of a reform support program, with an interest rate of 1.19% and a grace period of 5.5 years. The latter would have a repayment term of 20 years.

This funding was close to being lost, but deputies approved it on a razor’s edge on December 20.

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