A team by the International Monetary Fund (IMF) is expected to meet with the Costa Rica government officials in San
A team by the International Monetary Fund (IMF) is expected to meet with the Costa Rica government officials in San Jose today to discuss the ongoing economic reforms required under the existing IMF loan agreement. The talks come amidst the IMF’s third round of reviews of the country’s ongoing economic reforms and are part of a 36-month $1.8 billion loan arrangement under the IMF’s Extended Fund Facility.
The first two rounds of reviews were completed earlier this year and acknowledged important progress in the economic reforms meant to increase the economy’s resilience by fostering financial and monetary stability and creating sustained job growth. However, the reforms have also been controversial. Large-scale public protests erupted across Costa Rica in 2021 in response to some of the IMF’s demands, including a freeze on public sector salaries and an increase in taxes.
The recent uptick in global commodity prices—particularly oil—and the economic repercussions of the COVID-19 pandemic have weighed hard on the country’s current account and international reserves. Still, the discussions are likely to end positively for the Costa Rican government, with additional funding from the IMF expected. The Costa Rican economy managed to grow by 7.8 percent in 2021 and economic reforms are progressing well, according to the IMF team that visited the country in June.