Presidential Candidate Promises to Reduce Deficit

Costa Rican flag at the Plaza de Cultura. / February 6, 2014 / Zhu / Flickr

Presidential candidate Carlos Alvarado Quesada says that he will make shrinking the budget deficit a priority. Voters in Costa Rica will return to the polling booth this Sunday to decide between center-left Carlos Alvarado and conservative candidate Fabricio Alvarado Muñoz.

While gay marriage has been the dominant issue in this campaign, whoever wins the presidency will have to tackle Costa Rica’s growing fiscal problems.

Alvarado Quesada plans to shrink the deficit to 3 percent of the gross domestic product by 2022, reports Reuters. The current budget deficit is 6.2 percent.

In his government plan, Alvarado Muñoz says, “The deficit is only valid if it is sustainable and this implies that the State must have the capacity to achieve financial equilibrium over time.”

This is a stance not likely to be adopted by lawmakers in San Jose who have been at loggerheads over the deficit. President Luis Guillermo Solís proposed replacing the sales tax with a value-added tax last year, but the legislature rejected the idea. Since the recent elections, the Legislative Assembly is reconsidering that proposal.

Costa Rica has typically run a budget deficit. What makes the current fiscal situation different is the size and expanding nature of Costa Rica’s budget deficit.
The budget deficit is expected to expand to 7.1 percent this year.

Recent polling data shows Fabricio Alvarado Muñoz ahead of the runoff election this Sunday, April 1.

A poll by OPol found that 36.2 percent of voters support Alvarado Muñoz, 25.5 percent supported Alvarado Quesada, 14.4 percent undecided, and 20.9 percent who said they do not plan to vote.

Alvarado Muñoz has consistently led in the polls in recent weeks.

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