By Caribbean News Global
WASHINGTON, USA – Costa Rica will receive a $250 million loan from the Inter-American Development Bank (IDB) to finance its efforts to contain the COVID-19 sanitary crisis and mitigate its impacts on the economy; meantime, IDB has approved a $400 million operation to help finance Panama’s efforts to contain the sanitary crisis, mitigate its impact on vulnerable households, and promote policies to reduce the pandemic’s short-term effects on the economy.
The budget-support, fast disbursement loan is in line with a rapid financial assistance (RFI) arrangement approved in April by the International Monetary Fund to help tackle the COVID-19 emergency and its effects on the country’s economy.
The funds will help the government to continue implementing a countercyclical fiscal policy during the crisis and preserve Costa Rica’s macroeconomic stability, thus contributing to alleviate the pandemic’s impact on business and vulnerable households. The program will also support government’s efforts to reduce the fiscal deficit and ensure public-debt sustainability; promote economic recovery; safeguard the stability of the financial system and the balance of payments, and help promote competitiveness and improve the business environment.
The IDB loan, which will be disbursed in a single tranche, has a seven-year amortization period, a three-year grace period and an interest rate based on LIBOR.
The budget-support loan will provide Panama’s government with rapid disbursement funds to finance emergency current expenses and generate a mid-term fiscal policy strategic framework to recover fiscal sustainability and ensure macroeconomic stability.
The IDB support complements a financial program approved in April by the International Monetary Fund aimed at providing rapid financial assistance to help combat the COVID-19 crisis in the country.
Under the Bank’s program, Panama commits to implement measures to ensure a stable balance of payments and a sustainable public debt-to-GDP ratio, as well as to resume a gradual fiscal policy agenda to ensure fiscal sustainability in the post-emergency period.
The IDB loan, which will be disbursed in a single tranche, has a seven-year amortization period, three years of grace, and an interest rate based on LIBOR.