World Bank supports Costa Rican spending cuts
The World Bank expressed support Thursday for the spending cuts proposed by the government of Costa Rica to address the country’s fiscal deficit, which has reached 6.2 percent of GDP.
Finance Minister Rocío Aguilar visited the Legislative Assembly Wednesday to present a package of drastic cuts that includes a public hiring freeze, salary freezes for senior public officials, and reductions to the government’s budget for travel expenses, propaganda, travel and events.
“The major challenges that Costa Rica currently faces are reducing the fiscal deficit and stabilizing public debt, given that they’re a threat to the principles that govern its social [programs],” World Bank representative Fabrizio Zarcone said in a news release.
He added that “although the measures announced by Minister Aguilar are not enough to reduce a fiscal deficit of this magnitude, they’re necessary to start a path toward consolidation.”
Zarcone insisted that the legislature must also approve a public finance bill to allow tax reform and additional cuts to public spending.
The last four Costa Rican governments have attempted to enact tax reform without success, and the deficit has continued to grow.
Opposition parties in the Legislative Assembly have conditioned their support to tax reform on austerity policies from the government.
You may be interested
This week in the Peace Corps: Training to be a Peace Corps VolunteerThe Tico Times - August 21, 2018
Last month Peace Corps Costa Rica received over 40 new trainees in the Youth Development (YD) and English (TEFL) sectors.…
Brazil sends troops after clashes at Venezuela borderAFP / Paula Ramon - August 21, 2018
SAO PAULO, Brazil— Brazil's President, Michel Temer, called an emergency meeting of key ministers Sunday after ordering troops to the…