## Costa Rica: Sovereign Asset and Liability Management – Scoping Mission

_High-Level Summary Technical Assistance Reports, June 15, 2023_

## Source details

**Canonical URL:** [Costa Rica: Sovereign Asset and Liability Management – Scoping Mission](https://www.imf.org/en/publications/high-level-summary-technical-assistance-reports/issues/2023/06/15/costa-rica-sovereign-asset-and-liability-management-scoping-mission-534773)

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## Bibliographic details
- Authors: David A. Grigorian, Phillip Anderson, Antonio Juambeltz
- Published: June 15, 2023
- Series: High-Level Summary Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798400246852.029

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### Overview
- High-level summary technical assistance report on sovereign asset and liability management (SALM) for Costa Rica.
- Aided by a 36-month Extended Fund Facility in place since March 2021, Costa Rica’s reform efforts toward strong, inclusive, and sustainable growth are showing tangible results.
- The balance sheet analysis in this report is described as a first step to developing a consolidated sovereign balance sheet.

### Rationale for a comprehensive SALM framework
- A comprehensive SALM framework can have significant advantages over separate management of sovereign assets and liabilities.
- It allows for:
  - analysis of the financial characteristics of the whole balance sheet of the sovereign,
  - identification of sources of costs and risks,
  - quantification of the correlations among these sources.
- Implementing a full SALM framework can be challenging, but countries have applied it with a range of scope and policy objectives.

### Key findings on public sector balance sheets
- The central bank of Costa Rica’s balance sheet has negative equity and significant USD assets and liabilities.
- Most state-owned enterprises are in reasonably good financial health and can fund some investment from their retained earnings.
- The state-owned banks are profitable and liquid, and reflect dollarization in the economy.

### Policy implications and priorities (implied by findings)
- Develop the consolidated sovereign balance sheet starting from the presented balance sheet analysis.
- Consider SALM implementation that aligns scope and policy objectives with institutional capacity, given implementation challenges.
- Use consolidated analysis to identify and quantify cost and risk sources and their correlations to inform liability management, asset deployment, and investment funding decisions.

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_Source: https://www.imf.org/en/publications/high-level-summary-technical-assistance-reports/issues/2023/06/15/costa-rica-sovereign-asset-and-liability-management-scoping-mission-534773_