Journal Issue

Costa Rica: Staff Report for the 2019 Article IV Consultation—Informational Annex

International Monetary Fund. Western Hemisphere Dept.
Published Date:
April 2019
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Fund Relations

(As of January 31, 2019)

Membership Status: Joined: January 8, 1946; Article VIII

General Resources Account:SDR Million% Quota
Fund holdings of currency298.0780.69
Reserve Tranche Position71.3419.31
SDR Department:SDR Million% Allocation
Net cumulative allocation156.53100.00

Outstanding Purchases and Loans:


Latest Financial Arrangements:

TypeDate of ArrangementExpiration DateAmount Approved (SDR Million)Amount Drawn (SDR Million)

Projected Payments to Fund

(SDR Million; based on existing use of resources and present holdings of SDRs):


Exchange Rate Arrangement. Costa Rica’s de jure current exchange rate arrangement classification is “managed float.” The central bank committed to allow the exchange rate to be freely determined by foreign currency supply and demand but reserved the right to participate in the market to meet its own foreign currency requirements and those of the nonbank public sector and, at its discretion, to prevent sharp fluctuations in the exchange rate. Since August 2018, the central bank has allowed more flexibility in the exchange rate by departing from the 2 percent band against the U.S. dollar and limited use of FX intervention to addressing episodes of large exchange rate volatility. Accordingly, the de facto exchange rate arrangement was reclassified to “floating” from “crawl-like”, effective August 21, 2018. Costa Rica maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions.

Article IV Consultation. The last Article IV consultation was concluded on June 27, 2017 (Country Report No. 17/156).

FSAP participation and ROSCs. The FSAP took place in 2001 and was updated in 2008. A data ROSC took place in 2002 with a reassessment in 2010. A fiscal ROSC took place in 2007, with a reassessment in 2013.

Technical Assistance.
DepartmentTime of DeliveryPurpose
STA, CAPTAC-DR Real SectorFebruary 2018

April 2018

November 2018

November 2018

February 2017

April 2017

August, September 2017

October 2017

January 2018

March 2018

June 2018

August 2018

October 2018
Government Finance Statistics (GFS): Technical Assistance

GFS: Focused Training Technical Assistance

GFS: Diagnosis

GFS: Implementation Strategy

National Accounts System (NAS): Service Surveys

NAS: Construction survey quarterly measurements

NAS: Service Surveys

NAS: Annual Accounts by Institutional Sector

NAS: Quarterly National Accounts

NAS: Monthly Indicator of Economic Activity, Manufacturing and Commerce

NAS: Integrated Economic Accounts and Financial Assets Survey

NAS: Quarterly National Accounts

NAS: Integrated Economic Accounts/ Business Economics Study

NAS: Annual Accounts: primary sector.
MCM, CAPTAC-DRApril 2017

January 2018

March 2018

January, February 2017

February, April 2017

July 2017

April 2018

July, September 2018

November 2018
OMX: Strengthening central bank’s capacities for financial stability analysis

OMX: Support in designing a facility of last resort

OMX: Systemic risk monitoring at the central bank

SBF: IFRS Training

SBF: Credit risk supervision

SBF: Liquidity risk supervision

SBF: Treasury management workshop

SBF: Credit risk supervision

SBF: IRRBB regulation
FAD, CAPTAC-DRFebruary 2017

February, April 2017

April 2017

July, October 2017; February 2018

February 2018

April 2018

April 2018

February 2017

March 2017

September, October 2017; April 2018

October, November 2017

January 2018

March 2017

April 2017

July 2017; February, April 2018

September, November 2017

April 2018
AAA: Container control model

AAA: Process management

AAA: Value database

AAA: Improvement of clearance and registration processes

AAA: Risk-based segmentation

AAA: Improvement of clearance processes

AAA: Improvement of customs processes

AAT: Strengthen the audit area

AAT: Strengthen the taxpayer registry

AAT: Strengthen the Audit Area

AAT: Strengthen the Taxpayers Registry

AAT: Strengthen the Comprehensive Control of VAT Credit (massive controls)

PFM: Accounts – Budget – Costing

PFM: Treasury – Treasury Single Account

PFM: Fiscal Risk-Specific Risks

PFM: Treasury-Contingency plan

PFM: Fiscal Risks – SOEs

Resident Representative: Gerardo Peraza (based in Guatemala) is the regional resident representative for Central America, Panama and the Dominican Republic.

Relations with the World Bank and Bank-Fund Collaboration Under thet Joint Management Action Plan (JMAP)

1. The IMF’s Costa Rica team is in coordination with the World Bank’s Costa Rica team to identify macroeconomic challenges and macro-critical reforms and define the work plans of the two teams.

2. The teams agree that Costa Rica’s main macroeconomic challenges are to safeguard fiscal sustainability, strengthen the monetary policy framework, maintain financial sector stability and enhance competitiveness.

3. Based on the shared assessment of macroeconomic challenges, the teams identify four reform areas as macro-critical:

  • Fiscal consolidation. The fiscal reform, which incorporates both revenue and spending measures, is a critical step to restoring fiscal sustainability. However, its full and timely implementation is key. Additional front-loaded consolidation, based on well-designed revenue measures while taking steps to protect the poor, is needed to further reduce debt and near-term fiscal financing pressures, and to build fiscal space for potential shocks and contingent liabilities (e.g., pensions). More efforts to increase spending efficiency, strengthen fiscal institutions, and streamline debt management are also needed.
  • Monetary policy framework. Further institutional reforms and enhancing transparency of monetary policy would help to strengthen the inflation targeting framework. The recent increase in exchange rate flexibility and limited use of FX intervention to addressing episodes of large exchange rate volatility should be maintained.
  • Financial sector stability. Approval of legislation on consolidated supervision, deposit insurance and banking resolution will be critical to bring the regulatory framework up to international best practices. Implementation of outstanding FSAP/FSSR recommendations would enhance the resilience and inclusiveness of the financial system.
  • Competitiveness. Continued progress with the implementation of structural reforms, including those that are part of the work plan for OECD accession process, will boost competitiveness and foster inclusive growth.

4. The teams agree on the following division of labor:

  • Fiscal consolidation. The IMF (the Fund) will continue to provide policy recommendations on macro-fiscal issues, including the overall strategy of fiscal consolidation and implementation of the fiscal reform. The World Bank (the Bank) will seek opportunities to provide technical assistance to support the use of public-private partnerships as a vehicle to finance key infrastructure projects.
  • Monetary policy framework. The Fund will continue to provide policy recommendations to strengthen the inflation targeting regime and to maintain a flexible exchange rate regime.
  • Financial sector stability. The Bank and the Fund will cooperate as necessary in assisting the country in implementing the FSAP/FSSR recommendations.
  • Competitiveness. The Bank will continue to provide policy recommendations in key areas. In terms of lending, the government is being supported by a project in higher education (approved in September 2012), and a health operation (approved in March 2016). The government has also requested technical assistance from IFC Advisory services to improve the investment climate.

5. The teams have the following requests for information from their counterparts:

  • The Fund team requests to be kept informed of progress in the above macro-critical structural reform areas. Timing: when milestones are reached (and at least semi-annually).
  • The Bank team requests to be kept informed of the Fund’s assessments of macroeconomic policies and prospects. Timing: when milestones are reached (and at least semi-annually).

6. The table below lists the teams’ separate and joint work programs for 2019–20.

Table 1.World Bank and IMF Planned Activities in Macro-Critical Structural Reform Areas
TitleProductsProvisional Timing of MissionsExpected Delivery Date
World Bank Work ProgramPublic Expenditure Review

Tax and Trade Work

OECD Accession Support
May 2019

June 2020

July 2019
IMF Work ProgramStaff visit

Regional Conference

Article IV Consultation

Technical assistance:

Revenue administration

Customs administration


Debt management

Banking supervision and regulation

Money and FX market operations

Government finance statistics

National Accounts and price statistics
September 2019

December 2019

February 2020

September 2019

December 2019

February 2020

7. The attached table summarizes the financial relations between Costa Rica and the World Bank (in million U.S. dollars).

Table 2.Costa Rica and the World Bank: Financial Relations
Project NameTotal loanUndisbursed through FY19Projected disbursements in FY19/20
Higher Education Improvement Project200205/15
Strengthening Universal Health Insurance4201950/75
Fisheries Project90Under preparation0/5

8. Other analytical or advisory services:

Task NameDelivery
PMR MRP Implementation Costa Rica28-Mar-2019
PMR Domestic C-Market Infrastructure28-Mar-2019
PMR Costa Rica: carbon offset demand29-Mar-2019
PMR: carbon offset supply (P3)29-Mar-2019

Relations with the Inter-American Development Bank

Recent activities. The IBD´s loan portfolio in Costa Rica has 11 sovereign guaranteed operations, with an approved amount of US$1,627.3 million. The available amount for disbursements is US$889.1 million (55 percent of the approved) and is concentrated in the areas of Transportation (40 percent), Energy (28 percent), Education (10 percent), Citizen Security (8 percent), Integration and Commerce (6 percent), Water and Sanitation (5 percent) and Innovation (2 percent). The average age of the operations is 2.56 years. Disbursements of sovereign guaranteed operations during 2019 are expected to reach US$55.9 million, concentrated in the areas of Energy (89 percent), Innovation (5 percent) and Others (6 percent). Disbursement projections do not consider US$350 million of a Policy Based Loan (PBL) that is being discussed with the government.

IDB Disbursements, Amortization and Net Flows Sovereign Guaranteed Operations(In millions of U.S. dollars)
Interest and charges12.211.910.99.910.310.713.222.225.342.552.1
Net cash flow18.91.5-60.9-29.9-82.6-164.6-119.5-76.7-83.5-152.668.7

Projections (February 2019). Do not include US$350 million of a PBL that is being discussed with the government.

Projections (February 2019). Do not include US$350 million of a PBL that is being discussed with the government.

Sovereign Guaranteed Operations (as of February 8, 2019)(In millions of U.S. dollars)
Loans in execution*1,627.3733.84.4889.1
Cantonal Road Network Program55.455.40.00.0
Water and Sanitation Program73.
Violence Prevention and Social Inclusion Promotion Program132.4132.40.00.0
Power Sector Development Program 2012–16 (Reventazón Hydroelectric Project)250.0168.04.477.6
Building and Equipping of Education Infrastructure167.5167.50.00.0
Innovation and Human Capital for Competitiveness Program35.
Infrastructure Transport Program (PIT)450.0170.00.0280.0
Border Integration Program of Costa Rica100.00.00.0100.0
First Renewable Energy, Transmission and Distribution of Electricity Program200.00.00.0200.0
Tropical Storm Nate Emergency Response Program20.
Cantonal Road Network II Program144.00.00.0144.0
Non-reimbursable Technical Cooperations**

Excludes Private Sector Loans;

Excludes MIF Technical Co-operations.

Excludes Private Sector Loans;

Excludes MIF Technical Co-operations.

Statistical Issues

(As of February 2019)

General: Data provision is broadly adequate for surveillance. The quality of macroeconomic data has continued to improve in recent years. This was confirmed by a reassessment of the Data Module Report on the Observance of Standards and Codes (ROSC) that was published in February 2010. Further statistical improvements are being pursued, including in the real, monetary, fiscal and balance of payments sectors. The Central Bank, the Ministry of Finance, and the National Institute of Statistics and Census make data available to the public through regular official publications on their websites (,, and

National accounts: National accounts are compiled generally in accordance with the System of National Accounts 2008 (2008 SNA). The Central Bank disseminated the annual national accounts data for the years 1991–2016 and quarterly estimates up to 2018 Q3. Quarterly estimates are released with around a 90-day lag, but TA is assisting in the compilation of quarterly supply and use tables that may reduce this towards 60 days, as well as providing more frequent granular data. The present base year is 2012 but the Central Bank plans to publish during the second semester of 2019 preliminary estimates rebased to 2017. Estimation of real estate activities including owner-occupied housing has been improved. Accounting depreciation is used instead of estimating consumption of fixed capital. In the new system, double deflation method is applied to obtain annual value added in constant prices; whereas single extrapolation is used for quarterly volume estimates using output volume indicators and appropriate price indices are used to derive current value estimates. Changes in inventories are largely obtained following the 2008 SNA recommendations for those products for which enough information is available, though TA recently recommended improvements to estimates for cattle and poultry. The informal activity of households as producers of goods and services is included in GDP levels (but not separately estimated) via the compilation of employment and remuneration matrices.

Price statistics: Consumer price index (CPI) compilation generally follows the concepts and definitions of the CPI Manual. Its structure, scope, and coverage were updated in March 2017. The index reference period is June 2015. However, the CPI weights are based on the 2012/2013 Income and Expenditure Survey so are now out of date. The index only covers urban households. These comprise approximately 73 percent of the total population and 82 percent of the total consumption expenditures of Costa Rica. Atypical movements in the data are investigated and corrected when necessary. During 2018 a new Income and Expenditure Survey was collected, and a rebasing of the CPI may take place during 2019.

The PPI generally follows the concepts and definitions of the PPI Manual, and is calculated both by product and economic activity (for manufacturing and selected services activities). The base year of the PPI for domestic manufacturing and for services (transportation, accommodation and food services, and professional services) is 2012.

Government Finance Statistics: The concepts and definitions used in compiling GFS generally follow the guidelines of the GFSM 1986. However, financing data and government debt, which use national concepts that combine instruments and holders, are not in accordance with international standards. Monthly fiscal statistics are only compiled and disseminated for budgetary central government (although these data are not reported to STA), while annual statistics are compiled and disseminated for the entire public sector and its subsectors. Annual data for the GFS Yearbook are reported on a regular basis, most recently for 2017.1 The place of issuance (Costa Rica or abroad) criterion is followed to classify domestic and foreign debt, instead of the internationally recommended holder residency criterion. Fiscal data discrepancies among national compilers on particular items are not regularly reconciled, although large fluctuations or discrepancies are investigated. Fiscal statistics are not regularly reconciled with monetary statistics, or other macroeconomic statistics.

Monetary and Financial Statistics: Central Bank of Costa Rica (CBCR) reports the Standardized Report Forms (SRFs) 1SR for CBCR, 2SR for the other depository corporations (ODCs), and 5SR for monetary aggregates for publication in the IMF’s International Financial Statistics (IFS) on a monthly basis with a lag of two months. The reported monetary statistics are broadly in line with the methodology of the Monetary and Financial Statistics Manual (MFSM). The classification of financial instruments and economic sectors follows the MFSM with some exceptions. Accrued interest is not classified together with underlying instruments, as recommended by the MFSM. The CBCR is working on expanding the coverage of the monetary statistics to include money-market investment funds (MMF) as ODCs and non-MMF investment funds and pension funds as other financial corporations.

Financial sector surveillance: Costa Rica reports all core financial soundness indicators (FSIs) and one of the 13 encouraged FSIs for deposit takers on a monthly basis for posting on the IMF’s FSI website with less than one quarter lag. The authorities are planning to expand the reported FSIs for the encouraged set of deposit takers.

External sector statistics: The Central Bank of Costa Rica (BCCR) compiles and disseminates quarterly balance of payments and international investment position (IIP) statistics, which are produced on a sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) basis. Source data are generally adequate and derived from sound collection programs and work is still ongoing to improve the coverage of financial transactions of the nonfinancial private sector (such as those related to trade credit and advances), and remuneration of employees.

The BCCR also compiles and disseminates on a monthly basis the Data Template on International Reserves and Foreign Currency Liquidity, reports semi-annual data to the Coordinated Portfolio Investment Survey (CPIS) and annual inward and outward Coordinated Direct Investment Survey (CDIS), and submits quarterly external debt statistics to the Quarterly External Debt Statistics (QEDS) database.

Data Standards and Quality: Costa Rica is in observance with the Special Data Dissemination Standards (SDDS). Data Module Report on the Observance of Standards and Codes (ROSC) was published in February 2010.

Costa Rica: Table of Common Indicators Required for Surveillance(As of February 24, 2019)
Date of latest observationDate receivedFrequency of Data5Frequency of Reporting5Frequency of Publication
Exchange RatesFeb 19Feb 19DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1Feb 19Feb 19DDD
Reserve/Base MoneyFeb 19Feb 19DDD
Broad MoneyJan 19Feb 19MMM
Central Bank Balance SheetJan 19Feb 19MMM
Consolidated Balance Sheet of the Banking SystemJan 19Feb 19MMM
Interest Rates2Feb 19Feb 19DDD
Consumer Price IndexJan 19Feb 19MMM
Revenue, Expenditure, Balance, and Composition of Financing3– Central GovernmentJan 19Feb 19MMM
Stocks of Central Government and Central Government-Guaranteed Debt4Jan 19Feb 19MMM
External Current Account BalanceSep 18Dec 18QQQ
Exports and Imports of Goods and ServicesSep 18Dec 18QQQ
GD P/GN PSep 18Dec 18QQQ
Gross External DebtSep 18Dec 18QQQ
International Investment PositionSep 18Dec 18QQQ

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discounts rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

Including currency and maturity composition.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discounts rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

Including currency and maturity composition.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

1Costa Rica regularly reports to STA GFS division annual data in the format of GFSM 2014. The institutional coverage for Revenues and Expenses is General Government, but for Transactions and Stocks of assets and liabilities is Budgetary Central Government plus Social Security Fund.

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