Recent evolution of Costa Rican public finance

I was just reviewing data on the statement of operations of the central government of Costa Rica and I thought that maybe some of you can find interesting findings.


Data are for the central government of Costa Rica. Although Costa Rica is a unitary republic, the central government is somewhat similar to the "federal government". It excludes municipalities and state owned companies. Data are for the period Dec-06 through Jan-12 and are measured in multiples of real colones of Dec-06. The source is www.bccr.fi.cr.

As you see, there was a surplus since Dec-07 through Dec-08. Basically, the deficit has been increasing since then. The maximum deficit occurred in Oct-11. A first interesting finding is that the deficit was due more to income reduction than to expenditure expansion.














Reviewing sources of income, one finds that, on average, collection of customs taxes account for 28% of income and earnings taxes for 27%.
Customs diminished 24% in the period Oct-08 through Nov-09. This occurred mainly due to the international financial crisis and consequent shrinkage of international trade.

This diminution accounts for the main source of deficit increase.

On the side of expenditure, the main findings are these: on average, payrolls account for 37% of expenditure and current transfers for 36%. They constitute by and large the main source of expenditure. However, they didn’t increase meaningfully; i.e. their growth didn't accelerate.

However, if you see total expenditure you may notice a hump in for Dec-10 through Dec-11. This was due to a 50% increase in transfer of capital to other public sector institutions. All over the period Dec-06 through Jan-12, this item alone accounts for 7% of expenditure.