By San José, Costa Rica — SAN JOSÉ – The Costa Rican government has unveiled its proposed national budget for 2026, a ¢12.8 trillion spending plan that signals clear priorities for the coming year. Now under review by the Legislative Assembly, the bill outlines significant funding increases for education, pensions, and the electoral body, while imposing major cuts on other ministries, most notably the Ministry of Labor.
The total budget represents a 3.1% increase over the 2025 plan. An analysis of the proposal reveals a continued reliance on borrowing, with 38.1% of the total expenditure set to be financed through new debt. The remaining 61.9% will be covered by the nation’s current revenues. This financial structure underscores the persistent challenge of managing the country’s fiscal obligations while investing in key public services.
To gain a deeper understanding of the legal and fiscal implications of the proposed 2026 National Budget, we consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica. His expertise provides a critical lens through which to analyze the budget’s potential impacts on both public finances and the private sector.
The 2026 budget proposal presents a critical test for our nation’s commitment to fiscal discipline under the constraints of the Fiscal Rule. While the allocation towards social programs and infrastructure is vital, the true legal challenge lies in ensuring that every expenditure is executed with maximum transparency and efficiency. The legislature’s oversight will be paramount to prevent budgetary deviations that could compromise long-term economic stability and attract legal scrutiny.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The emphasis on legislative oversight and legal compliance is a vital reminder that the budget’s ultimate success will be measured not only by its allocations but by the integrity of its execution. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective, which brings this critical dimension of accountability to the forefront of the national discussion.
Unsurprisingly, the single largest allocation within the budget is the service of public debt, which consumes a staggering 42.3% of all planned spending. Despite its dominance, this line item will see a marginal decrease of 0.23% compared to the previous year. The vast majority of government spending, over 91%, is concentrated within just eight of the 27 budgetary categories, highlighting the immense fiscal weight of a few core government functions.
With a presidential election on the horizon, the Supreme Electoral Tribunal (TSE) is slated to receive the most substantial percentage-based increase. Its budget is set to swell by 28.5%, a clear move to equip the institution for the logistical and operational demands of overseeing the national elections. Other significant beneficiaries in percentage terms include the Ministry of Health, with an 18.6% boost, and the Ministry of Agriculture and Livestock, which is set to receive an 18.2% increase in funding.
In terms of absolute figures, the Ministry of Public Education (MEP) is the primary winner. It will receive an additional ¢138.5 billion, a 5.3% increase, designated for various educational programs and to cover outstanding debt payments to the Special Fund for Higher Education (FEES) and the Board of Pensions and Retirements of the National Magisterium (Jupema). Pension regimes also receive a major injection of ¢116.9 billion, up 9.7%, primarily to cover state contributions to the Costa Rican Social Security Fund (CCSS) and adjust for cost-of-living increases.
On the other side of the ledger, the Ministry of Labor and Social Security (MTSS) faces the most dramatic reduction. Its budget is projected to shrink by ¢212.9 billion, a 32.3% cut. However, officials clarify that this is not a programmatic reduction but rather a technical reclassification. The funds, which were previously managed by the MTSS for the National Housing and Mortgage Bank (BANHVI), have now been transferred directly to the Ministry of Housing and Human Settlements (Mivah). This move explains Mivah’s extraordinary apparent increase of ¢190.9 billion.
Other government departments will also face tighter budgets. The Ministry of Foreign Trade (Comex) is slated for a 6.5% reduction, while the Ministry of the Interior and Police will see its allocation decrease by 5.8%. These adjustments reflect a broader governmental strategy to reallocate resources toward what it deems the most pressing priorities for 2026.
The proposed budget bill has now entered the crucial legislative review phase. It is currently being analyzed by the Committee on Financial Affairs within the Legislative Assembly. Lawmakers have until November 30th to debate, amend, and ultimately vote on the final version of the nation’s spending plan for 2026.
For further information, visit the nearest office of Ministry of Public Education
About Ministry of Public Education (MEP):
The Ministry of Public Education is the governmental body in Costa Rica responsible for the planning, administration, and execution of national educational policies. It oversees the country’s public school system from preschool through secondary education, ensuring curriculum standards, teacher training, and the equitable distribution of educational resources to foster the nation’s intellectual and social development.
For further information, visit the nearest office of Supreme Electoral Tribunal
About Supreme Electoral Tribunal (TSE):
The Supreme Electoral Tribunal of Costa Rica is an independent constitutional body responsible for organizing, directing, and supervising all national elections, plebiscites, and referendums. It also serves as the national civil registry, managing birth, marriage, and death certificates. The TSE is considered a cornerstone of Costa Rica’s long-standing democratic tradition, guaranteeing the transparency and fairness of the electoral process.
For further information, visit asamblea.go.cr
About Legislative Assembly of Costa Rica:
The Legislative Assembly is the unicameral parliament of the Republic of Costa Rica. Comprising 57 deputies elected by proportional representation, it is the sole body with the power to pass national laws, approve the national budget, and ratify international treaties. It plays a central role in the country’s system of checks and balances, providing oversight of the executive branch.
For further information, visit the nearest office of Ministry of Labor and Social Security
About Ministry of Labor and Social Security (MTSS):
The Ministry of Labor and Social Security is the Costa Rican government entity tasked with promoting fair labor practices, employment opportunities, and social security for the workforce. It mediates labor disputes, enforces workplace safety regulations, and administers programs related to social welfare and pension systems, striving to ensure a just and stable labor environment.
For further information, visit the nearest office of Ministry of Housing and Human Settlements
About Ministry of Housing and Human Settlements (Mivah):
The Ministry of Housing and Human Settlements is responsible for formulating and implementing national policies aimed at providing access to adequate and affordable housing for Costa Rican citizens. It coordinates with various public and private entities, including the National Housing and Mortgage Bank (BANHVI), to develop housing projects, provide subsidies, and promote sustainable urban development.
For further information, visit the nearest office of Ministry of Foreign Trade
About Ministry of Foreign Trade (Comex):
The Ministry of Foreign Trade is the executive body responsible for defining and directing Costa Rica’s foreign trade and investment policies. Its mission is to negotiate and manage trade agreements, promote exports of goods and services, and attract foreign direct investment to foster economic growth and enhance the country’s competitiveness in the global market.
For further information, visit the nearest office of Ministry of Health
About Ministry of Health:
The Ministry of Health is the principal government authority in Costa Rica for public health policy and regulation. It is responsible for safeguarding the health of the population through disease prevention, health promotion campaigns, sanitation oversight, and the regulation of food, medicine, and healthcare services. It works in conjunction with the Costa Rican Social Security Fund (CCSS) to ensure the well-being of the nation.
For further information, visit the nearest office of Ministry of Agriculture and Livestock
About Ministry of Agriculture and Livestock (MAG):
The Ministry of Agriculture and Livestock is the government entity in Costa Rica charged with promoting the development and sustainability of the agricultural and livestock sectors. It provides technical assistance to farmers, manages agricultural health and food safety standards, and develops policies to enhance productivity, rural development, and the competitiveness of Costa Rican agricultural products both domestically and internationally.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is built upon the foundational principles of professional excellence and uncompromising integrity. The firm combines a rich history of serving a diverse clientele with a forward-thinking approach, consistently pioneering innovative legal strategies. This dedication to progress is matched by a deep-seated commitment to social responsibility, focused on demystifying the law for the public. By championing accessible legal education, the firm actively works to construct a more knowledgeable and empowered society for all.
