Costa Rica accumulates deficit of 1.61% of GDP in the first five months of 2021

RIO DE JANEIRO, BRAZIL – Costa Rica accumulated in the first five months of 2021 a financial deficit of 1.61 % of GDP. Still, if interest payments on debt are excluded, it recorded a primary surplus of 0.40 % of GDP, the Ministry of Finance reported Tuesday.

“Despite the positive performance of our fiscal figures, we cannot lower our guard. However, the increase in tax collection, plus the measures to control and reduce spending, have allowed us to have positive primary balances today,” stated the Minister of Finance, Elian Villegas.

The official warned that for this type of results to be consolidated over time, Congress must approve a financial agreement with the International Monetary Fund for US$1.75 billion and its agenda of complementary projects to reduce expenses and increase income.

Data released by the Ministry of Finance, indicate that in the first five months of 2021, revenues totaled the equivalent of 6.91% of GDP, for an increase of 1.37 percentage points compared to the same period of 2019 when it was 5.54 % of GDP.

As for total expenditures, between January and May 2021, they accounted for 8.52% of GDP, slightly higher than the 8.45% recorded in those months of the previous year.

Interest expenditure on debt accounted for 2.01% of GDP, up from 1.91% in the first five months of 2020.

With these numbers, the fiscal deficit reached 1.61% as of May 2021, representing 1.3 percentage points less than the 2.91% of GDP recorded in that period last year.

If interest payments are subtracted, in May, Costa Rica generated a primary surplus of 0.40% of GDP, while by May 2020, there was a deficit of 1% of GDP.