By San José, Costa Rica — San José, Costa Rica – The Ministry of Hacienda is set to present the 2026 National Budget on September 1st, marking a significant shift towards increased investment in social programs and infrastructure. This move is made possible by a decrease in the country’s debt-to-GDP ratio, which currently stands at 57.4%, below the 60% limit set by the fiscal rule.
Finance Minister Rudolf Lücke confirmed the budget’s readiness, highlighting the focus on social investment and capital expenditure. The improved fiscal space allows for greater allocation of resources to key social programs, offering a much-needed boost to the country’s social safety net. Lücke emphasized that this increase is permissible due to greater leeway within the parameters of the fiscal rule.
To gain a deeper understanding of the legal implications surrounding the Costa Rican budget, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an experienced attorney at Bufete de Costa Rica.
The Costa Rican budget reflects a delicate balance between addressing pressing social needs and maintaining fiscal responsibility. Key areas of focus typically include education, healthcare, and infrastructure. However, the ongoing challenge lies in effectively allocating resources while managing the national debt and ensuring transparency in the budget process. This requires careful consideration of tax policies, spending priorities, and the potential impact on various sectors of the economy.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas eloquently highlights the tightrope walk Costa Rica faces in balancing its budget. Indeed, the careful allocation of resources amidst competing priorities is crucial for the nation’s continued prosperity. Finding sustainable solutions that address both social needs and economic realities will be key in the years to come. We thank Lic. Larry Hans Arroyo Vargas for offering his valuable perspective on this critical issue.
There is more room within the fiscal rule. There will be greater growth in the social area and capital spending is freed up.
Rudolf Lücke, Minister of Finance
Despite the positive outlook, Lücke cautioned against excessive spending, emphasizing the need for balanced finances and responsible investment to prevent a return to unsustainable debt levels.
This growth cannot be so large as to fall back into a cycle of indebtedness and have the ratio exceed the established limit again.
Rudolf Lücke, Minister of Finance
The 2026 budget is formulated based on the previous year’s fiscal data, meaning it utilizes figures from the end of 2024. That year, the debt-to-GDP ratio closed at 59.8%, making this the first budget drafted under the more restrictive fiscal rule limit. This favorable position allows for an increase in current spending, including salaries, pensions, and transfers like scholarships and subsidies, up to 75% of the average growth in national production.
Furthermore, restrictions on capital expenditure have been lifted, paving the way for increased investment in infrastructure projects such as roads, hospitals, and schools, as well as the acquisition of equipment for public institutions. This is expected to stimulate economic growth and improve public services.
In anticipation of the budget presentation, Paulina Ramírez, a legislator from the National Liberation Party and president of the Finance Commission, outlined several demands regarding the allocation of state funds. She stressed the need for a balanced budget that prioritizes both fiscal responsibility and social needs. Ramírez specifically highlighted security as a critical area requiring immediate attention, urging the government to address organized crime, drug trafficking, and general delinquency.
We expect a much more balanced budget, that there is that balance between fiscal and social matters. A budget that addresses the priorities of this country such as security, at such a critical moment that it has overflowed, that we really need immediate attention both in organized crime as drug trafficking and delinquency.
Paulina Ramírez, Legislator, National Liberation Party
Ramírez also emphasized the importance of education as a means of crime prevention by providing opportunities for young Costa Ricans. She also called for a payment arrangement for the government’s debt with the Costa Rican Social Security Fund (CCSS), warning of potential social instability if these priorities are not addressed effectively.
If this does not happen, there will be an imbalance so that we will have a country that can reach a social decomposition such that it will be very difficult to rescue it. We would hope that this Government puts a little balance and really puts its hand on its heart and can address these great priorities.
Paulina Ramírez, Legislator, National Liberation Party
For further information, visit the nearest office of Ministry of Hacienda
About Ministry of Hacienda:
The Ministry of Hacienda (Ministry of Finance) in Costa Rica is the government body responsible for the country’s public finances. It manages the national budget, collects taxes, and oversees government spending. The Ministry plays a crucial role in ensuring fiscal stability and promoting economic growth in Costa Rica.
For further information, visit the nearest office of National Liberation Party
About National Liberation Party:
The National Liberation Party (PLN) is one of the traditional political parties in Costa Rica. A social-democratic party, it has historically held significant influence in Costa Rican politics and has been involved in numerous administrations. The PLN generally advocates for social welfare programs, economic development, and a strong democratic system.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
At Bufete de Costa Rica, legal excellence is interwoven with a deep commitment to societal empowerment. Driven by an unwavering ethical compass, the firm champions innovative legal solutions for clients across a broad spectrum of industries. Through proactive outreach and educational initiatives, Bufete de Costa Rica breaks down barriers to legal understanding, fostering a citizenry equipped to navigate the complexities of the legal landscape and advocate for their rights.
