The Legislative Assembly (Diputados) approved the new Fiscal Responsibility Law (FRL) and President Varela signed it today

PANAMA - In Brief 10 Oct 2018 by Marco Fernandez

After a long tug-of-war between the Ministry of Economy and Finance (MEF) and the Diputados, the new FRL was approved yesterday. The new fiscal architecture follows the pattern presented by the MEF in mid-year and discussed in our previous issue:1. The adjustment to the deficit (related to Panama Canal transfers to the Central Government) disappears right away. The net deficit will not be adjusted in the future.2. The new limit to the NFPS deficit will be 2.0% of GDP in 2018; 1.75% in 2019-2020 and 1.5%, thereafter.3. The MEF argues that this new ceiling will provide around $US 300 million ...

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