WASHINGTON, June 16, 2023 - The World Bank Board of Executive Directors today approved a loan to support Costa Rica's post-pandemic recovery program, with special emphasis on protecting family incomes, strengthening small and medium-sized enterprises (SMEs) and boosting fiscal sustainability based on green and low-carbon growth.
"This new budget support loan demonstrates the World Bank's confidence in the government's commitment to inclusive and sustainable economic growth. The Costa Rican economy is emerging from the severe impact of the pandemic, but adverse external conditions have presented us with new challenges that we must address in terms of economic reactivation and fiscal consolidation," said Minister of Finance, Nogui Acosta Jaén.
The series of credits supports three mutually reinforcing pro-development pillars:
- Protect people's jobs and incomes from the impact of COVID-19 and foster the recovery of small and medium-sized businesses. This will contribute to achieving a combination of international shock response measures and reforms leading towards more efficient and resilient social protection.
- Reinforce the sustainability of public finances through improved tax collection, more efficient spending and better management of public debt.
- Promote green growth and low-carbon development that is resilient, equitable, climate-smart and sustainable, and that makes greater use of clean technologies.
"While Costa Rica has made much progress in the environmental, economic, and social spheres, the reduction of poverty and inequality remains an ongoing challenge," said Carine Clert, World Bank country manager for El Salvador and Costa Rica."With this operation we seek to underpin the Government of Costa Rica's efforts to progress towards fiscal consolidation and investment in more ecological production systems, as well as helping to strengthen basic protective measures for the most vulnerable members of the population, especially women."
The US$500 million loan, financed by the International Bank for Reconstruction and Development (IBRD), is based on the SOFR interest rate plus a variable spread in a single currency in US dollars, with a final maturity of 19.5 years, including a four-year grace period.
