IMF Staff Country Reports

Panama: Selected Issues

Publication Date:

April 21, 2020

Electronic Access:

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Summary:

This Selected Issues paper focuses on background, challenges, and policy options in Panama. Panama stands at a crossroad between taking the leap to become an advanced economy or getting stuck in the middle-income trap. The beginning of a new administration provides a window of opportunity to initiate and implement ambitious reforms. This note takes stock of fiscal issues in Panama and proposes policy options. The new administration’s fiscal agenda should feature a comprehensive reform of tax and customs administrations, a review of tax incentives and exemptions and consider steps toward a broader tax policy reform. Efforts to further strengthen the fiscal framework with the appointment of the members of the Fiscal Council should continue going forward. Panama should adopt best practice fiscal accounting and reporting methods. A comprehensive assessment and management of fiscal risks is necessary to create buffers and safeguard public finances given fiscal policy’s exclusive stabilization role.

Series:

Country Report No. 2020/125

Subject:

Anti-money laundering and combating the financing of terrorism (AML/CFT) Crime Financial institutions Fiscal policy Housing prices Mortgages Prices Real estate prices Revenue administration