Government registers budget surplus

July 18, 2008

As a result of a 25 percent increase in tax collection and despite a slowing economy and rising food and energy costs, the Costa Rican government achieved a $230 million financial surplus during the first half of the year, according to the Finance Ministry.

A financial surplus occurs when government revenues surpass government expenses (including interest payments on the public debt).

The surplus is nearly four times larger than the $60 million surplus registered during the first half of 2007, said Finance Minister Guillermo Zúñiga.

Zúñiga said that the state of public finances was such that the country would be able to successfully face its second semester obligations such as salary increases, the aguinaldo (a 13th month of salary paid to workers in December), as well as investments in roads and security, combating poverty and compensating for high international food prices.

From January through June, the government collected $2.15 billion in taxes, 25 percent more than during the same period in 2007, and spent $1.92 billion, a 15.5 percent increase.

The main sources of income for the government were customs duties, which brought in $807 million, followed by income taxes of $558 million and sales taxes of $406 million.

Despite the first semester surplus, Zúñiga expects Costa Rica to finish the year with a deficit of 0.5 percent of gross domestic product (GDP), about $100 million.

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