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COUNTRY INSIGHTS

One step back and one step forward in boosting growth: the impact of U.S. tariffs and progress on the mine’s reopening
PANAMA · In Brief · 28 Apr 2025

Assessing the potential impact of U.S. tariffs on Panama’s economyThe U.S. administration suspended country-specific tariffs for 90 days starting April 9 but maintained the 10% baseline tariff on all goods and countries, including Panama. It remains unclear whether the U.S. government will ultima...

Logjam in Panama’s logistics sector: Hegseth’s visit, the Panama Ports audit, the Trans-Isthmian Railway purchase, and the new gas pipeline
PANAMA · Report · 11 Apr 2025

The visit of US Secretary of Defense Peter Hegseth to Panama, during which a memorandum of understanding and a joint declaration were signed, aims to strengthen security cooperation through joint exercises and a "cost-neutral" compensation mechanism for security services between the US and the Pa...

The Ministry of Foreign Affairs of Panama granted yesterday a safe-conduct to former President Ricardo Martinelli, which had been requested months earlier by the Government of Nicaragua but had not been accepted by Panama
PANAMA · In Brief · 28 Mar 2025

Martinelli was initially an asylum seeker without safe-conduct. Yesterday, the Ministry of Foreign Affairs wisely granted him safe-conduct on "humanitarian" grounds. By handling the situation this way, the ministry strategically avoided inadvertently legitimizing Martinelli's claim of political a...

The Pension Reform allows both sides to claim victory, mining reactivation is the next step in the reform sequence, and the Supreme Court opens the door to resolving Ricardo Martinelli’s case
PANAMA · Report · 18 Mar 2025

The approval of the reform to the pension law can be considered a victory for all the opposing groups, except for the leftist unions and educators: the retirement age was not increased, the additional employer contribution was staggered, but the individual notional account system was maintained, ...

Large 2024 deficit (7.35% of GDP) and commitment of MEF to reduce it to less than the 4.0% ceiling of the Fiscal Law
PANAMA · In Brief · 20 Feb 2025

Today, Minister Chapman presented the fiscal situation for the end of 2024 and perspectives for 2025. The deficit of the NFPS of 7.35% in 2024, above our estimate of 6.2% and above the 2.0% that the Fiscal Law established in the 2020 revision by Minister Alexander. The explanation is twofold: und...

The proposal for reforms to the CSS pension plan presented by the government was modified by the Labor Commission of the Legislative Assembly on Tuesday night
PANAMA · In Brief · 05 Feb 2025 · 3 responses

Most legislators opposed the proposal due to the three-year increase in the retirement age, arguing that the Government failed to adjust the public sector payroll, thus placing the financial burden on the older population. This claim holds some truth: the number of new public employees increased ...

Mr. Trump and the Panama Canal: An “external shock” and the necessity of a three-phase strategy for Panama
PANAMA · Report · 21 Jan 2025

Panama has been in the international economic and political spotlight in recent weeks, particularly following President Donald Trump’s inaugural address on January 20: “We are going to take back the Canal that was unfairly taken from us by Panama and which imposes unjustly high tolls.” This re...

Pension reform postponed, again… Martinelli loses in court, again… First Quantum seeks allies, again… Trump tries to influence Panama, again.
PANAMA · Report · 23 Dec 2024

Two tasks were pending for December 2024: (1) the Government's Economic Program (PEG), which we will analyze in detail in early January once it is officially published. It will form the basis for our projections for the next five years; and (2) the CSS reform, particularly the pension plan within...

The reform of the pension system goes to the Legislative Assembly
PANAMA · Report · 15 Nov 2024 · 1 response

The reform of the CSS legislation, in particular the pension system, is the most recent initiative of the Mulino administration, after the Fiscal Responsibility Law enacted at the beginning of the month (which suffered minor changes in the legislative) and the Budget Law, which was changed substa...

The 2024-2025 economic reform's timeline: two steps forward, still four to go
PANAMA · In Brief · 01 Nov 2024

Summary We discuss the key reforms that will take place during the Mulino administration. The Fiscal Responsibility Law (LRSF) and the Public Sector Budget for 2025 were approved last week, with political setbacks. The Legislative Assembly (AN) introduced changes in the proposal of the Ministry o...

Another setback for the Executive: the Budget Committee returns the MEF Proposal... we analyze the options of both groups
PANAMA · In Brief · 23 Oct 2024 · 1 response

The 2025 budget project, approved by the cabinet on October 15 and presented the same day to the Assembly, was returned (not rejected) after the first debate in the Legislative Assembly. The 15 members of the budget committee requested the Minister of Economy and Finance to modify his proposal to...

New Fiscal Social Responsibility Law is approved by the Cabinet and submitted to the Legislative Assembly
PANAMA · In Brief · 18 Oct 2024

On October 14, the Assembly received the proposal for a new fiscal law (LRSF in Spanish). This law is necessary to establish the deficit ceilings before enacting the 2025 budget (which we will comment on in an upcoming report). This new version of the LRSF includes three topics within the same bo...

The order of factors does affect the product: a defeat for the Executive in the Assembly
PANAMA · In Brief · 11 Oct 2024 · 1 response

This week, the Executive Branch presented its proposal for the 2025 national budget to the Legislative Branch, which was challenged on Thursday by the Budget Commission for three reasons: (1) it was not submitted on time, as the Constitution (Article 184) requires the proposal to be sent within t...

The challenges of the pension system and Mulino's path to reform
PANAMA · Report · 16 Sep 2024

President Mulino made several important announcements on Thursday, September 12, focusing on the path of the pension reform and placing strong emphasis on measures to improve the healthcare system, which could lead to political gains. On the pension system, Mulino confirmed a dialogue table start...

Mulino faces five challenges over the next eighteen months. Chapman taps the local market. The principle of specialty that Martinelli is pursuing may be a formidable obstacle to the path of reforms
PANAMA · Report · 26 Aug 2024 · 1 response

The Mulino administration has inherited five critical challenges that impact the future of the country's public finances and the economy as whole: 1) the revision of the sub-system of defined benefits of the state pension program; 2) a tax reform; 3) the decision about the copper mining project, ...

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