Imf Costa Rica Agreement
SAN JOSE, July 1 (Reuters) – Costa Rican lawmakers on Thursday approved a nearly $1.8 billion loan from the International Monetary Fund (IMF), a lifeline for the Central American country`s economy. “This is a firm and necessary step that allows us to move forward in the fiscal consolidation agenda, which provides an indispensable basis for economic recovery,” said President Carlos Alvarado. The isthmus nation ended last year with a budget deficit of 8.7% of GDP and an economic decline of 4.5% as it struggled with the consequences of the COVID-19 pandemic. (Alvaro Murillo reports from San Jose; Letter from Stefanie Eschenbacher; “When a country borrows from the IMF, it commits to taking steps to overcome economic and structural problems,” the IMF said. “In the context of an EFF, these commitments, including specific conditions, should place a strong emphasis on structural reforms to address institutional or economic weaknesses, as well as measures to maintain macroeconomic stability.” Tax Benefits Reduction and Adjustment of Rates on Capital Income to Strengthen the Tax System Act (see Bill) This initiative aims to create a uniform framework for employment in the public sector with eight salary scales. The government says this would simplify public employment and help curb the increase in wage spending from the state budget. These are the legislative projects that Costa Rica has accepted as part of its agreement with the IMF: Costa Rica`s goal is to stabilize the country`s public debt and reach a primary surplus of 1% by 2023. Reduce public spending by eliminating vacancies and freezing pension increases in the state budget (more than 450,200 inhabitants and until the national debt is less than 60% of GDP) (see bill) Sale of the Conape portfolio (Multisectoral Dialogue Agreement) Our standards: Thomson Reuters` principles of trust. Special Tax Law on Lottery Prizes and Other Games of Chance Sold, Distributed or Marketed by the Social Welfare Board (see Draft Law) Executive Decree 42798-H on Compliance with the Tax Rule for Ongoing Transfers, Purchase of Goods and Services, Special Services, Substitutions and Any Remuneration. (See Decree) Lawmakers are generally expected to give the green light to the loan in a second vote scheduled for July 12. Law on Solidarity and Temporary Contribution on the Benefits of State-Owned Enterprises to the Costa Rican People for Fiscal Adjustment (see Draft Law) Luxury Real Estate Tax (Amendment of the Current One) (see Draft Law) Costa Rica receives a three-year loan of $1.78 billion from the International Monetary Fund under the Financial Institution`s Extended Mechanism of Funds (EFF). . .