WASHINGTON, March 2 — The IMF board yesterday approved a US$1.8 billion (RM7.2 billion), three-year loan for Costa Rica to help the government shore up the economy battered like many by the Covid-19 pandemic.

The loan agreement, which allows for an immediate disbursement US$296.5 million, is on top of the emergency support provided to the Central American nation in April 2020 US$522 million, the International Monetary Fund said in a statement.

“The Costa Rican authorities have responded promptly to the Covid-19 shock, helping avoid a deeper crisis. However, the socio-economic impact of the pandemic has been sizable, weakening its fiscal position and generating a large financing gap,” said IMF Deputy Managing Director Mitsuhiro Furusawa.

While the board praised the nation’s response the statement cautioned that “ the recovery is expected to be protracted” and “risks to the outlook remain elevated given the uncertainty surrounding the pandemic.”

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The fund estimates the Costa Rican economy will grow by 2.6 per cent in 2021, after contracting 4.5 per cent last year, including a nearly 41 per cent drop in the critical tourism sector. — AFP