Costa Rica: President’s Fiscal Approach a Risky Bet

CENTRAL AMERICA - Report 02 Sep 2014 by Francisco de Paula Gutierrez

Executive Summary

The outlook for Costa Rica for 2014-2015 is clouded by the fiscal situation.The Central Bank projects a government deficit of 6% of GDP in 2014, and 6.6% in 2015.Clearly those are worrisome numbers. Nor is a solution in sight. Plans to increase revenues are based on improving tax collection mechanisms – yet there are no tax proposals in the short-term pipeline, or decisions that look likely to cut spending.

In his first hundred days in office speech, President Luis Guillermo Solís suggested a gradual approach for dealing with the fiscal situation, and...

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