On Tuesday afternoon, Minister of Finance Rocío Aguilar met with several legislators to request the approval of an extraordinary budget. According to the government, this is necessary
to correct a shortfall in the resources originally included in the budget for 2018 that was approved last year in relation to the amortization of the internal debt.”
The extraordinary budget amounts to ¢ 600,044.9 million and the administration states that these resources will be used
to cover the amortization of internal debt that must be made this year.”
This request occurs in the midst of the tense atmosphere in the Legislative Assembly due to the discussion of a new tax package.
According to the Treasury, the 2018 regular budget will not be achieved for two fundamental reasons:
1. Placements of short-term securities that occurred last year due in 2018 were made after the creation of the budget for this year. At that time it was estimated that during the second half of 2017 a total of 292,700 million colones would be placed in the short term.
However, in that semester such placements were made for a total of 891,700 million colones, due in 2018, mainly to cover the lack of liquidity in the last quarter of last year, as a result of the recurrent fiscal deficit of the last years. This generated a difference of 599,000 million colones compated to the forecasts with which this year’s budget was approved.
2. The volume of debt exchanges carried out in the first semester of 2018 was below what was estimated last year during the preparation of the 2018 Budget.
Several legislative factions and sectors of the country have been asking the government for weeks to cut spending before requesting new taxes.