IMF approves over $500 million for Costa Rica

WASHINGTON

The IMF executive board has allowed for the disbursement over $500 million to Costa Rica  after a successful review of the Central American country's reform programs, the organization said in a statement.

The approval of the economic reform program within the framework of the Extended Fund Facility (EFF) arrangement makes it possible to transfer approximately $272 million, bringing the total to $1.6 billion.

Another $243 million will come from the approval of the third review of the Resilience and Sustainability Facility (RSF) arrangement, the IMF said. The total under this agreement is about $730 million.

"Costa Rica is the first country to complete an RSF arrangement," which was launched to support poor or vulnerable countries in the face of long-term difficulties caused by global warming, according to the IMF.

"The completion of the reviews marks the successful conclusion of an ambitious, multi-year, multi-dimensional reform program... that is helping reshape Costa Rica's economy and advance the climate agenda," Kenji Okamura, deputy managing director of the IMF said in a statement.

The IMF expects real GDP growth to be around 4 percent this year.

"Growth has remained strong and inflation is rising to the lower end of the central bank's tolerance range," Okamura said. "Formal employment, private-sector wages and poverty are all moving in the right direction."

Okamura recommended avoiding "legislative changes that erode revenue," adding that "the coverage of the fiscal rule should be maintained."