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COUNTRY INSIGHTS

The calm before the storm: the good news from 2023 and what lies ahead for the economy and fiscal situation in 2024
PANAMA · Report · 26 Mar 2024

In 2023, real GDP growth reached 7.3%, despite the November social crisis. Growth was driven by traditional sectors such as construction, commerce, transportation, and real estate. Monthly indicators suggested a slowdown in Q3, with a contraction in Q4. Construction activity, supported by public ...

Ricardo Martinelli (via his alter ego José Raúl Mulino) leads the polls by a wide margin
PANAMA · In Brief · 12 Mar 2024

Today, the newspaper La Prensa published the latest presidential survey, in which José Raúl Mulino leads voter preferences with 26%, followed by a technical tie among candidates Ricardo Lombana (10.8%) of the MOCA party, Martin Torrijos with the Popular Party (10.8%), and Rómulo Roux (10.2%), lea...

Public sector cash flow and the IMF Article IV Report update
PANAMA · Report · 11 Mar 2024

In 2024, the public sector faces a projected 3.9% decline in total revenues due to the absence of significant one-time occurrences from the previous year, while primary expenditures are expected to rise by 8.6%. This increase is primarily driven by growth in current expenditure, particularly payr...

Balancing the books, shifting the landscape: the NFPS deficit and Martinelli's disqualification
PANAMA · Report · 15 Feb 2024 · 1 response

Despite having to resort to accounting artifices, the government upheld the fiscal ceiling, as highlighted by credit rating agencies and analysts. In 2022, the Non-Financial Public Sector deficit was 3.98% (when the legal limit was 4.0%), and in 2023, it fell below the required 3.0%. In the last ...

The verdict from the Supreme Court is out: Martinelli will not run in the 2024 elections; he will go to prison and pay a fine.
PANAMA · In Brief · 02 Feb 2024

Today, the Supreme Court rejected the appeal for annulment filed by Martinelli's legal team, marking the last opportunity for the former president to challenge the verdict of a 128-month prison sentence and a fine of USD$19.2 million for money laundering (in the "New Business" case) to purchase a...

Martinelli's political fate and debt sustainability analysis: both with implications for 2024
PANAMA · Report · 30 Jan 2024

Ricardo Martinelli faces the outcome of his appeal in the corruption case against him. Media and analysts are speculating about the date of the Supreme Court decision, likely confirming the guilty verdict. We conducted a debt sustainability analysis aiming to estimate the level of primary bala...

Our projection for 2024: The economy is uncertain, the NFPS budget is under discussion, and it formally complies with the fiscal law
PANAMA · Report · 26 Dec 2023

The year 2023 will be a reminiscence of how sudden events can alter the course of economic projections. While the first semester of 2023 witnessed robust growth of 8.8%, driven by the traditional sectors, we anticipate a slowdown in the second half of the year, culminating in a 1.9% contraction i...

Minister Alexander proposed revisions to the budget on the expenditure side, and the legislature is likely to approve them next week. Changes in the Fiscal Law were enacted by the Cabinet.
PANAMA · In Brief · 22 Dec 2023

Cabinet Resolution N. 135 of December 18 authorized several modifications (decreases) to the Public Sector Budget presented to the Legislative Assembly on July 27, 2023. The Budget Committee announced last week to the Minister of Economy and Finance (MEF) that these modifications were unsustainab...

GDP grew 8.8% up to June. Our forecasts remain positive but lower for 2023. 2024 will be a quasi-stagnant economy after the closing of the mining operation
PANAMA · In Brief · 01 Dec 2023 · 2 responses

The GDP growth rate until June reached 8.8%. For now, without knowing the complete GDP data, which has not been published by the statistical institute, we maintain our annual forecast at 5.5% due to a deceleration in the third quarter and disruptions in agricultural production, tourism, and the C...

Iudex locuta, causa finita…ma non troppo
PANAMA · In Brief · 28 Nov 2023

After a week of demonstrations in front of the Supreme Court building in Panama City, road blockades, and media pressure, on the early morning of Tuesday (a holiday in Panama), the CSJ declared Law 406, which approved the contract between the government and Minera Panama (a subsidiary of Canada's...

The future of Minera Panama's operation lies in the hands of the Supreme Court of Justice
PANAMA · Report · 20 Nov 2023 · 3 responses

President Cortizo announced on Thursday that Minera Panama had made a “restricted payment” of US 562.8 MM to the government, around 75% of the US 750 MM that was expected for this fiscal year. If the Supreme Court declares sometime within the next few weeks that the now infamous Law 406 (deemed a...

The current situation concerning the rejection of the approved concession contract with Minera Panama
PANAMA · Report · 31 Oct 2023

After a week of protests, President Cortizo announced a public consultation and the presentation of a mining moratorium bill in the National Assembly. In less than 24 hours, the Electoral Tribunal declared that there are no conditions to organize a public consultation. Protests and discontent con...

Money, money, money…it´s not always sunny. The contract with Minera Panama approved by legislators and ratified by Cortizo, but the positive impact on public finances is overshadowed by nationwide protests against the contract
PANAMA · Report · 27 Oct 2023

The end of the year presents a challenge for Panama's public finances as the likelihood of meeting fiscal targets diminishes due to lower-than-expected revenue collection. The final quarter's performance, hinging on the Panama Canal, remains critical to closing this gap. Currently, the government...

The dog that didn't bark: a new mining contract without changes in the financial conditions
PANAMA · In Brief · 11 Oct 2023 · 1 response

The Cabinet approved a revision of the original contract between the Nation and Minera Panama yesterday, following a five-to-four vote against the initial version in the Commerce Committee of the National Assembly last month. Among the modifications included in the recent draft, the main topics t...

The surprising results of the 2023 Census and their implications for public policy
PANAMA · Report · 18 Sep 2023

Considering the latest census data, significant demographic trends are emerging in Panama, carrying implications for public policy. The population is exhibiting higher levels of education and is also aging. Women have progressed in terms of their socioeconomic condition, and there is a growing re...

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