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COUNTRY INSIGHTS

Short-term boost, long-term bets: Panama Canal projects and the economic outlook
PANAMA · Report · 07 Jul 2025

Panama’s economy posted strong 5.2% GDP growth in Q1 2025, driven primarily by the recovery of the Panama Canal and the expansion of Copa Airlines. The transportation sector alone contributed 56% of total growth, reflecting a rebound in toll revenues (+42.4% YoY) following the 2024 drought and th...

President Mulino´s State of the Union Speech: Messages to the voters and to the international markets
PANAMA · In Brief · 02 Jul 2025

Two hours after a surprise election of the Legislative Assembly's governing authorities, when a self-proclaimed opposition group to the government of José Raúl Mulino secured a narrow victory over Ricardo Martinelli's party, in a strange alliance with the deteriorating PRD, it was President Mulin...

The new leadership of the Legislative Assembly will be headed by a last-minute surprise candidate, Jorge Herrera, who defeated the favorite backed by José Raúl Mulino and Ricardo Martinelli and the PRD party.
PANAMA · In Brief · 01 Jul 2025

Context ahead of a key session in the Assembly Every year, on July 1st, the Legislative Assembly elects its presidents and vice presidents for a one-year term. The person who presides over the Assembly signs the laws issued by the State’s bodies, authorizes the legislature’s expenses (an importan...

Social unrest significantly impacts economic activity and weakens government leverage for future reforms
PANAMA · Report · 21 May 2025

Panama is navigating a complex landscape of social unrest, fiscal challenges, and policy shifts. The economy has been hit by month‑long strikes from SUNTRACS, teachers, and banana workers—driven by grievances over the pension law reform, the proposed reopening of the copper mine, ACP’s Río Indio ...

Slide Presentation - Panama in Focus: US Relations, Canal Strategy and Fiscal Discipline
PANAMA · Presentation · 14 May 2025

How will US-Panama relations and US tariffs impact Panama’s economy? What strategy will be applied to the Panama Canal amid disruptions in global commerce? What's ahead for fiscal policy? Will Panama be able to navigate these challenges and protect its growth and investment grade? Get insight int...

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...

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