A participant stands near a logo of IMF at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua
FILE PHOTO: A participant stands near a logo of IMF at the International Monetary Fund – World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo

December 5, 2020

SAN JOSE (Reuters) – Costa Rica aims to begin talks with the International Monetary Fund in the first few weeks of 2021 in search of a loan to help weather a funding crisis which the coronavirus pandemic has aggravated, a top official said on Friday.

The Central American country is seeking some $1.75 billion from the IMF to bolster its finances as it faces the prospect of running up a budget deficit of more than 9% this year, with public debt rising to 70% of gross domestic product.

Austerity measures the government had proposed to win over the IMF caused major protests earlier this year and the government backed down from that plan in October.

President Carlos Alvarado this week said his government would be seeking fresh talks with the IMF, and Pilar Garrido, minister for national planning and economic policy, told broadcaster Radio Columbia she expected talks to begin soon.

“The IMF must define the date, but we hope that initial negotiations can take place at the beginning of next year in January, or at the latest in February,” she said.

Separately, Finance Minister Elian Villegas said authorities would have to line up tough measures to get a deal with the IMF.

Also speaking on the radio, Villegas said Costa Rica would have to “grit its teeth” to reduce public spending by 20% ​​in under four years, without providing details.

(Reporting by Alvaro Murillo; Writing by Dave Graham; Editing by Sonya Hepinstall)

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