Interest payments on government debt grew 177% in October

November 21^st, 2014 (InsideCostaRica.com) Interest payments on the government’s foreign and domestic debts grew 177% in October versus the same month last year, according to information released by the Ministry of Finance.

The increase comes as a result of public bond issues, including Eurobonds the country issued in recent years.

Meanwhile, government revenues for October grew by 7.3% versus the same month last year while expenses grew by 10.4%.

Costa Rica’s budget deficit stood at 4.4% of GDP in October versus 2.3% in October 2013.

Costa Rica’s most recent international bond issue, consisting of $1 billion in Eurobonds, occurred in April.  The government said last month that it is planning to raise an additional $1 billion through a new international bond issue sometime in the first half of 2015.

Costa Rica has more than $1.7 billion in previous bond issues coming to maturity in the first half of next year alone, and will need to refinance at least 61% of that amount with new debt in order to make good on its obligations, reports in September revealed.  Those figures only included bonds issued by the Treasury – The Central Bank also has bonds coming to maturity next year, though mostly in the second half.

Costa Rica’s credit rating was cut to junk status by Moody’s Investors Service in September, based on the country’s widening deficit and large debt burden.