Costa Rica: President Alvarado Desists From Asking an IMF Loan

Costa Rica’s President Carlos Alvarado announced on Sunday that his government will not negotiate an International Monetary Fund (IMF) loan and called for a national dialogue.

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On September 17, the government presented a proposal to negotiate with the IMF an agreement for a US$1.75 billion loan to stabilize the country's finances.

In order to repay that loan, Alvarado’s administration presented an economic proposal that included tax increases and the sale of some public assets, which caused a great deal of popular discontent.

He pointed out that there is still time to study alternatives to avoid an economic collapse, but he clarified that this time is not unlimited and that the worst scenario would be to do nothing.

Alvarado recognized the loan proposal was not well received by most of the country’s trade unions and acknowledge the need of a national dialogue to improve the economic situation.

Since September, opposition parties and workers called for demonstrations and roadblocks at strategic points to demand the government to desist from negotiating the IMF loan.

Costa Rica will begin 2021 with a fiscal deficit of 9 percent, a debt of about 70 percent of the Gross Domestic Product (GDP), and an economic contraction of 5 percent.