Costa Rica built Latin America’s model society, enacting universal health care and spending its way to one of the Western Hemisphere’s highest literacy rates. Now, it’s reeling from the financially crushing side effects of the coronavirus, as cratering revenue and crisis spending force a reckoning over a massive pile of government debt, the Washington Post reported. The pandemic is hurtling heavily leveraged nations into an economic danger zone, threatening to bankrupt the worst-affected.
Costa Rica’s legislative assembly on Monday approved the placement of up to $1.5 billion in bonds in coming months as the Central American country struggles to reduce its mounting debt burden, Reuters reported. Over the past 10 years, public debt in Costa Rica has doubled and now stands at about 53 percent of gross domestic product. The first tranche of the dollar bond debt issue will be placed in international markets from August, said Rocio Aguilar, Costa Rica’s finance minister. The government will have a year to complete the bond issue.