A report by Aldesa published in Pulso Bursatil states that:
The Macroeconomic Program 2012-2013, released today by the Central Bank of Costa Rica (BCCR) is closely linked to the tax reform, indicating that in 2012 the economy will grow by 3.8% instead of 4% due to the non-approval of the reform. In addition, the agency notes that, for the same reason, in 2013 it is expected to grow by 3.5% and not 4.5%, as originally planned.
The downward revision in the estimate of growth for this year, is due partly to the lower growth expected of the international economy, and secondly, to the consequences of fiscal deficits and its influence on interest rates. Within BCCR ‘s macroeconomic program the fiscal reform is the main protagonist, minimizing the significant impact of other variables on economic growth, and also condemning the national economy, if there is no reform, to significant imbalances and escalating interest rates, closing off the possibility of other alternatives to the tax reform and deficit financing being able to minimize the consequences of the deterioration in public finances.
Source: Pulsobursatil.com
More on this topic
January 2011
Aldesa analyzed the Macroeconomic Program 2011-12, by the Central Bank of Costa Rica, with projections for 2011.
In our view, one of the most important elements of the program and to which attention should be paid, has to do with projections for public finances.
Given the relative similarity of economic conditions between 2010 and 2011, the most important is the role played by the Central Government in managing the growing fiscal deficit.
July 2011
The BCCR raised its forecast for economic growth this year from 4.3% to 4.5%, while Costa Rica ECLAC estimates for growth of just 3.2%.
Referring to this issue, the Department of Analysis and Investment Strategy, Aldesa, described the Central Bank of Costa Rica as "very optimistic".
February 2012
Two years ago we used the same title to report on the growing trend of the debt / GDP ratio in Costa Rica. Today the news is that this ratio has reached nearly 50%.
The consequences are as you would expect: upward trend in interest rates because the state must meet its cash needs competing for credit with the productive sectors, and reduced state investment, especially in infrastructure, which compromises the ability of the economy to grow.
December 2011
The Central Bank of Costa Rica (BCCR) has announced that the country will close 2011 with a growth rate of 4% and a fiscal deficit equal to 5% of GDP.
Rodrigo Bolanos, president of the BCCR said at a press conference that the growth of 4%, is lower than last July’s projection of 4.5%.
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