Costa Rica Deficit Grows To $172 million

March 27, 2009

Costa Rica’s central government accumulated a ¢96 billion (over $171 million) budget deficit from February 2008 to February of this year, the Finance Ministry reported.

On Thursday, the ministry presented its February expense report showing a reduction in domestic earnings of 2.8 percent when compared to the same period last year. Spending, meanwhile, increased by 23.4 percent.

“Customs duties have continued to show the same negative (activity) since the end of (2008) as a result of the low domestic economic activity causing a lesser demand for imported products,” Finance Minister Guillermo Zúñiga said.

According to the Finance Ministry numbers, the rise in expenses was due primarily to an increase in salaries and social spending of 32.2 percent.

The government collected almost ¢154 billion ($275 million) in taxes during the month of February, which was a 19 percent reduction when compared with the February 2008 numbers.

If the fiscal situation stays on the same track, the country will confront a serious deficit, Zúñiga said on Thursday.

Aldesa, a financial consulting firm, said in a statement that the government’s finances could continue to deteriorate if there are additional decreases of state income from taxes.

–Vanessa I. Garnica

 

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