Cost of infrastructuThe Ajuelita bridge construction on the Circunvalación.
Th high cost of debt service limits public works. In the photo, the Ajuelita bridge construction on the Circunvalación.

QCOSTARICA – The need to borrow every month in order to pay current account expenses is the main cause of the continuing increase in the central government’s debt to GDP ratio.

At the end of 2014, total public debt, which includes the Central Bank of Costa Rica and other public sector entities represented 58.6% of all production. Rodrigo Bolaños, president of the Central Bank, said that “… For each additional 15 points of debt to GDP the (economic) growth rate could fall by about 1.5%. ”

In the case of the public debt of the central government, “… It reached at the end of 2014, an amount of ¢10.4 billion, equivalent to 39.3% of production, the highest in the last 10 years. ”

The former Minister of Finance, Edgar Ayales told that “… The most problematic part is that of the central government, as the rest of the public sector has a different dynamic, most receive their own income by selling services and part of their debt is for investment. The debt exists because the government needs to borrow each year in order to cover the expenses that it can not meet using current account revenue (the deficit). ”