Costa Rica faces a “critical fiscal juncture,” according to the conclusions in a recent report prepared by the Comptroller General of the Republic (CGR), which analyzes the fiscal and budgetary developments of the public sector in the country.
This state, the document says, is due to a high level of public debt and its constant growth, lower tax revenues and a high rigidity of public spending.
These trends are unsustainable in the medium term and with a high cost in terms of required fiscal adjustment,”
quotes the 2017Public Sector Fiscal and Budgetary Report, which analyzed the first half of 2017.
An example of this is that the Central Government’s financial deficit increased from 2.2% of Gross Domestic Product (GDP) in 2016 to 2.4% in 2017.
Regarding December 2016, Central Government debt reflects a growth of 7.2%, reaching ¢15,052,133 million.
In addition, public sector debt continued its growing trend and by June 2017 it reached ¢20,550,884 million.
According to the same report, the Government has increased its exposure to exchange rate and interest rate risk, while its indebtedness causes a decrease in risk ratings.