Costa Rica is borrowing US$300 million of loan from the World Bank to stimulate its economy ravaged by the travel-related restrictions imposed in response to the COVID-19 pandemic.
The new cash will support Costa Rica to protect “people’s income and jobs from the impact” of the pandemic, the lender said in a statement.
The bank also expects Costa Rica to strengthen small and medium enterprises and reinforce fiscal sustainability and layout foundations for a strong post-pandemic recovery.
“Costa Rica has a strong health care system and the authorities promptly responded to the health emergency; nevertheless the country has experienced the largest social, economic, and physical impacts since 2020, and currently faces a third, and a severe wave of COVID-19,” stated the bank.
The news comes barely a week after lawmakers in the central American country approved a loan for US$1.8 billion with the International Monetary Fund (IMF).
The tourism-dependent country saw 2 million fewer international visitors in 2020 than the year before, almost a 70% drop in demand. This dealt a severe blow to the industry that has employed more than 200,000 Costa Ricans.
The country’s economy contracted 4.5% last year, with the fiscal deficit rising to 8.7 % of GDP.