Costa Rica on Thursday formalized two budget support loans from the Inter-American Development Bank (IDB), for an amount of $ 500 million.

The first of the loans, of $ 250 million, will be used to deal with the health emergency caused by the Covid-19 pandemic, by supporting homes and businesses that have been affected, according to the finance ministry.

The second will concern structural reforms in the fiscal area, which increase the efficiency of the tax system and public spending.

“We are convinced that these operations will help consolidate fiscal and economic stability,” Elian Villegas, Costa Rica’s finance minister, said at a ceremony with Fernando Quevedo, IDB director for Central America.

The loans have repayment terms of seven and 20 years, respectively, with grace periods of three and five and a half years. Both credits have yet to be approved by the Costa Rican Legislative Assembly.

On June 10, Congress had already given the green light to another bill for two credits of $ 600 million: 300 million also correspond to the IDB and another 300 to the Central American Bank for Economic Integration (CABEI).

The Inter-American Development Bank is one of the main sources of long-term financing for economic, social and institutional projects in Latin America and the Caribbean.

In March 2021, the International Monetary Fund (IMF) approved Costa Rica’s access to credit over $ 1.75 billion to support an economy that closed last year with a budget deficit of 8.7 % and a debt of nearly 70% of its GDP.

In return, Costa Rica has embarked on a fiscal adjustment plan for the next three years.