The IMF has concluded its discussions with Costa Rica under Article IV and issued a report on 4 February 2015. Costa Rica currently has problems of weak growth and rising unemployment. The IMF is recommending budget consolidation to improve the fiscal accounts and make the public debt more sustainable. The IMF is also recommending the introduction of tools to support exchange rate flexibility and is looking for structural reforms to boost productivity.
The report notes that there is a relatively low revenue effort in Costa Rica compared to other countries at a similar stage of development and that this needs to be dealt with. The IMF considers that more revenue mobilization is necessary and recommends some administrative and policy reforms in this area. These include measures to widen the tax base, raise the rate of value added tax (VAT) and raise the marginal income tax rates for higher income brackets. The IMF has also noted that there is a social security actuarial deficit and that reforms in social security will be required to deal with this.
