Editing Economy of Costa Rica (section)

==Public debt and deficit==
One of the country's major concerns is the level of the public debt, especially as a percentage of the GDP (Gross Domestic Product), increasing from 29.8% in 2011 to 40.8% in 2015 and to 45% in 2016.<ref name="oecd.org">{{cite web|url=http://www.oecd.org/eco/outlook/costa-rica-economic-forecast-summary.htm|title=Costa Rica – Economic forecast summary (November 2017) |website=oecd.org|access-date=2 April 2018}}</ref><ref name="focus-economics.com"/><ref name="gfmag.com"/> The total debt in 2015 was $22.648 billion, up by nearly $3 billion from 2014. On a per capita basis, the debt was $4,711 per person.<ref name="countryeconomy.com">{{cite web|url=http://countryeconomy.com/national-debt/costa-rica|title=Costa Rica National Debt 2016|website=countryeconomy.com|access-date=2 April 2018}}</ref> Costa Rica had a formal line of credit with the [[World Bank]] valued at US$947 million in April 2014, of which US$645 million had been accessed and US$600 million remained outstanding.<ref name=wb>{{cite web|url=https://finances.worldbank.org/en/countries/Costa%20Rica|title=Costa Rica – Country Summary – World Bank Group Finances|work=World Bank Group Finances|access-date=11 June 2015|archive-url=https://web.archive.org/web/20150713121125/https://finances.worldbank.org/en/countries/Costa%20Rica|archive-date=13 July 2015|url-status=dead}}</ref>

In a June 2017 report, the [[International Monetary Fund]] stated that annual growth was just over 4% with moderate inflation. The report added that "financial system appears sound, and credit growth continues to be consistent with healthy financial deepening and macroeconomic trends. The agency noted that the fiscal deficit remains high and public debt continues to rise rapidly despite the authorities’ deepened consolidation efforts in 2016. Recent advances in fiscal consolidation have been partly reversed and political consensus on a comprehensive fiscal package remains elusive".<ref name="imf.org">{{cite web|url=http://www.imf.org/en/News/Articles/2017/06/27/pr17251-imf-executive-board-concludes-2017-article-iv-consultation-with-costa-rica|title=IMF Executive Board Concludes 2017 Article IV Consultation with Costa Rica|website=imf.org|access-date=2 April 2018}}</ref><ref name="imf.org1">{{cite web|url=https://www.imf.org/en/News/Articles/2017/05/15/ms051517-costa-rica-staff-concluding-statement-of-the-2017-article-iv-mission|title=Costa Rica: Staff Concluding Statement of the 2017 Article IV Mission|website=imf.org|access-date=2 April 2018}}</ref>

The IMF also expressed concern about increasing deficits, public debt and the heavy dollarization of bank assets and liabilities, warning that in tighter-than-expected global financial conditions these aspects would "seriously undermine investor confidence". The group also recommended taking steps to reduce pension benefits and increase the amount of contribution by the public and increasing the cost effectiveness of the education system.<ref name="imf.org"/><ref name="imf.org1"/>

The country's credit rating was reduced by [[Moody's Investors Service]] in early 2017 to Ba2 from Ba1, with a negative outlook on the rating. The agency particularly cited the "rising government debt burden and persistently high fiscal deficit, which was 5.2% of GDP in 2016". Moody's was also concerned about the "lack of political consensus to implement measures to reduce the fiscal deficit [which] will result in further pressure on the government's debt ratios".<ref name="moodys.com">{{cite web|url=https://www.moodys.com/research/Moodys-downgrades-Costa-Ricas-government-bond-rating-to-Ba2-continued--PR_361770|title=Moody's downgrades Costa Rica's government bond rating to Ba2, continued negative outlook|date=9 February 2017|website=moodys.com|access-date=2 April 2018}}</ref> In late July 2017, the Central Bank estimated the budget deficit at 6.1 percent of the country's GDP. A 2017 study by the Organisation for Economic Co-operation and Development warned that reducing the foreign debt must be a very high priority for the government. Other fiscal reforms were also recommended to moderate the budget deficit.<ref name="news.co.cr1"/>

In 2014, President Solís presented a budget with an increase in spending of 19% for 2015, an increase of 0.5% for 2016 and an increase of 12% for 2017.<ref name="qcostarica.com"/> When the 2017 budget was finally proposed, it totaled US$15.9 billion. Debt payments account for one-third of that amount. Of greater concern is the fact that a full 46% of the budget will require financing, a step that will increase the debt owed to foreign entities.<ref name="ticotimes.net1">{{cite web|url=http://www.ticotimes.net/2016/09/05/costa-rica-national-budget-2017|title=Government presents 2017 budget proposal with 12 percent hike|website=ticotimes.net|date=5 September 2016|access-date=2 April 2018}}</ref> In late July 2017, the Central Bank estimated the budget deficit at 6.1 percent of the country's GDP.<ref name="sandiegouniontribune.com">{{cite web|url=http://www.sandiegouniontribune.com/hoy-san-diego/news/|title=Hoysd.com: News Hoy San Diego – San Diego Union Tribune|website=sandiegouniontribune.com|access-date=2 April 2018|archive-date=16 December 2018|archive-url=https://web.archive.org/web/20181216031723/https://www.sandiegouniontribune.com/hoy-san-diego/news/|url-status=dead}}</ref>

===Liquidity crisis===

In early August 2017, President [[Luis Guillermo Solís]] admitted that the country was facing a "liquidity crisis", an inability to pay all of its obligations and to guarantee the essential services. To address this issue, he promised that a higher VAT and higher income tax rates were being considered by his government. Such steps are essential, Solís told the nation.<ref name="sandiegouniontribune.com"/> "Despite all the public calls and efforts we have made since the start of my administration to contain spending and increase revenues, there is still a gap that we must close with fresh resources," he said. The crisis was occurring in spite of the growth, low inflation and continued moderate interest rates, Solís concluded.<ref name="efe.com"/>
 
Solís explained that the Treasury will prioritize payments on the public debt first, then salaries, and then pensions. The subsequent priorities include transfers to institutions "according to their social urgency." All other payments will be made only if funds are available.<ref name="qcostarica.com"/>