Costa Rica on Thursday officially provided two $ 500 million in budget support to the Inter-American Development Bank (IDB).
The first of the $ 250 million loans will be used to assist in the health emergency caused by the Covid-19 pandemic to support affected homes and businesses, according to the Treasury Department.
The second is structural reforms in the fiscal area that will improve the efficiency of the tax system and public spending.
“We are confident that these operations will contribute to strengthening financial and economic stability,” said Elian Villegas, Costa Rican finance minister, during a ceremony with Fernando Quevedo, IDB manager for Central America.
The maturities are seven and 20 years, respectively, with grace periods of three and five and a half years. Both loans still need to be approved by the Costa Rican Legislature.
On June 10, Congress already gave the green light to another bill for two loans of $ 600 million: 300 million also correspond to the IDB, and another 300 to the Central American Bank for Economic Integration (CABEI).
The Inter-American Development Bank is one of the main sources of long-term financing for economic, social and institutional projects in Latin America and the Caribbean.
In March 2021, the International Monetary Fund (IMF) approved Costa Rica’s access to more than $ 1.75 billion in loans to support an economy that closed last year with a budget deficit of 8.7% and debt of almost 70% of GDP. …
In return, Costa Rica has committed itself to a budgetary adjustment plan for the next three years.