Fiscal Balance in Panama
Panama - Fiscal Balance
Government announces fiscal response to coronavirus pandemic fallout
In the face of the growing coronavirus pandemic, the government raised USD 2.5 billion in global debt markets on 26 March to help fund a sizeable response to the economic impact of the public health crisis. This, coupled with a USD 515 million emergency loan from the IMF, brings funds equivalent to approximately 5.0% of GDP at the government’s disposal. The proposed fiscal measures include increased healthcare spending, such as on the purchasing of supplies and test kits; relief payments to small businesses and informal workers; tax deferrals and unemployment benefits.
The measures will go some way to covering a sizeable balance of payments gap, although will likely prove insufficient to avoid a contraction in economic activity this year. The suspension of non-essential commercial activities in late March and a mandatory nationwide quarantine are likely to significantly hamper domestic activity in the first half of the year. Additionally, already-sizeable twin deficits will be weighed on further by additional borrowing, with a potential credit rating downgrade a key risk.
FocusEconomics Consensus Forecast panelists foresee a fiscal shortfall of 4.5% of GDP in 2020 and of 3.1% of GDP in 2021. Meanwhile the economy is projected to contract 2.4% in 2020, before growing 5.3% in 2021.
Panama - Fiscal Balance Data
|Fiscal Balance (% of GDP)||-2.3||-1.9||-1.9||-2.9||-3.1|
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July 3, 2020
Economic activity nosedived 34.7% year-on-year in April (March: +0.6% yoy).
June 26, 2020
Consumer prices fell 0.44% in March on a month-on-month basis, down from the 0.25% decline in February.
June 19, 2020
The economy expanded 0.4% in the first quarter of 2020 compared to the same quarter a year earlier, down from the 3.3% expansion recorded in the fourth quarter of 2019 and marking the worst growth reading since Q4 2009.
June 9, 2020
Economic activity increased 1.4% in year-in-year terms in March, which followed February's 1.7% increase.
April 21, 2020
In the face of the growing coronavirus pandemic, the government raised USD 2.5 billion in global debt markets on 26 March to help fund a sizeable response to the economic impact of the public health crisis.