Costa Rica: 2021 Article IV Consultation and Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica
IMF Staff Country Reports, March 1, 2021
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- Costa Rica: 2021 Article IV Consultation and Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica
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Bibliographic details
- Published: March 1, 2021
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513570921.002
Executive summary and macroeconomic impact
- Costa Rica has been hit hard by the COVID-19 pandemic, notwithstanding the authorities’ proactive policy response and the country’s well-established universal healthcare system.
- The socio-economic impact has been significant, exacerbating an already fragile outlook and pre-existing imbalances.
- The shock produced a significant toll on economic activity and unemployment—especially among women and the young.
- The shock has further weakened the country’s fiscal position and undermined the expected yields from the ambitious fiscal reform launched in late 2018.
- The pandemic generated a large financing gap; financial support through the Fund’s Rapid Financing Instrument (RFI) in 2020 provided temporary relief to respond to the pandemic and helped catalyze financial assistance from other official partners, but financing needs remain sizable over the medium term.
Key findings and vulnerabilities
- Health system: Costa Rica’s well-established universal healthcare system did not prevent major socio-economic disruption from COVID-19.
- Labor market: Unemployment increases were particularly acute among women and the young.
- Fiscal position: The pandemic weakened fiscal metrics and reduced the near-term yields from the late-2018 fiscal reform package.
- Financing: A large financing gap emerged as a result of the shock; RFI support in 2020 was temporary and catalytic, but medium-term financing needs remain sizable.
Policy considerations and implications
- Maintain proactive policy responses to manage public health and socio-economic impacts of the pandemic.
- Address the weakened fiscal position and the financing gap to restore fiscal sustainability and preserve reform momentum from late 2018.
- Coordinate with official partners and leverage catalytic financing to cover medium-term needs, building on the role the RFI played in 2020.
Publication and metadata
- Pages: 129
- Volume: 2021
- Issue: 048
- Series: Country Report No. 2021/048
- Stock No: 1CRIEA2021001
- DOI: https://doi.org/10.5089/9781513570921.002
- ISBN: 9781513570921
- ISSN: 1934-7685
- Publication date on landing page: March 1, 2021
- Subjects: COVID-19, Economic and financial statistics, External sector statistics, Fiscal policy, Government finance statistics, Health, Revenue administration
- Keywords: BCCR Law, Central America, Costa Rican authorities, COVID-19, CR, EFF policy commitment, External sector statistics, Global, Government finance statistics, ISCR, monetary policy stance, reform agenda
International Monetary Fund. Western Hemisphere Dept. "Costa Rica: 2021 Article IV Consultation and Request for an Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica", IMF Staff Country Reports 2021, 048 (2021).
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