Costa Rica IMF Staff-Level Agreement

Late Friday it was announced the IMF and Costa Rica reached a staff-level agreement for the USD1.75bn Extended Fund Facility (EFF) Program over 3 years.

• The IMF staff appear to be on board with the plan the government presented earlier this month, which seeks fiscal adjustments split between new revenues and expenditure cuts.
• After the announcement, Finance Minister Elian Villegas added that Costa Rica seeks to reduce its public debt load to 50% of GDP by 2035 with reforms under the facility. He said the government is targeting a primary fiscal surplus of 1% of GDP by 2023.
• To note, the deal is still subject to approval by an IMF board of directors and would then require approval in Costa Rica's congress. Delays are to be expected in its approval in congress, which is tasked with passing multiple bills associated with the plan.
• Costa Rica Dollar Bonds have jumped following the announcement.