Chinchilla’s concern is about the level of fiscal deficit, which will close this year about 4.5% of gross domestic product (GDP), according to official estimates, which is Costa Rica only grey area despite the international economic crisis
In Panama City as keynote speaker at a regional summit on information technology organized by the International Telecommunication Union, Chinchilla told EFE “We do not have time in the 18 months that remain (of government), to embark on a profound tax reform,”.
In April The Costa Rican Supreme declared the tax reform bill “unconstitutional” which originally was to create a tax on health and private education, sparking a controversy.
After this Supreme Court decision set back the government has accentuated the austerity policy in the implementation of expenditure and tries to improve the collection, said Chinchilla.
One measure includes a $4 billion bond as “credit conditions and interest rates” are “much more attractive” Chinchilla continued.
The Costa Rican Congress, which resumes next week after the holiday, is made up from 57 members, 24 of them from the ruling National Liberation Party.
The largest threat for the medium and long is the deficit and is the only black spot in the economy of Costa Rica, according to Chinchilla.
“The overall economy is healthy, and we have managed to sustain macroeconomic balances,” said Chinchilla, noting impressive growth rates, new job growth and inflation at the lowest in 40 years.
Chinchilla also warned that despite economic growth, Costa Rica is “the lowest tax burden in the region,” and that, based on that scenario, by 2017 the country’s debt will reach 60% of gross domestic product.
The Costa Rica News (TCRN)
San Jose Costa Rica