Press Release: Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of His Visit to Panama
IMF News, February 28, 2011
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- Published: February 28, 2011
Visit summary and meetings
- Press Release No. 11/57; February 28, 2011.
- Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), concluded his first visit to Panama as Managing Director.
- Meetings held with:
- President Ricardo Martinelli Berrocal
- Finance Minister Alberto Vallarino Clement and his team
- Financial sector authorities
- Emphasis on warm hospitality and “interesting and productive discussions.”
Economic performance and outlook
- Panama “is expected to remain one of the fastest-growing countries of the Americas.”
- Recent performance:
- The economy grew in 2009, when output in the region shrunk.
- Expanded by 7 percent in 2010.
- Is expected to continue to grow rapidly in 2011.
- Identified pillars of performance:
- Prudent macroeconomic policies
- A strong banking system
- Dynamic investment in infrastructure
Risks highlighted
- Inflationary pressures could intensify owing to:
- The impact of higher world commodity prices
- Low unemployment
- The ambitious public investment program
- Notwithstanding the strong anchor of the U.S. dollar, these factors could increase inflationary risks.
Policy recommendations and financial-sector resilience
- Encouraged the economic team to:
- Build on the recent tax reforms
- Continue with a policy of gradual fiscal consolidation to keep domestic demand in check and prevent overheating
- Welcomed authorities’ plans to deepen the financial sector’s resilience to shocks.
Social strategy and structural reforms
- Welcomed the government’s long-term economic and social strategy aiming to:
- Expand economic opportunities
- Reduce growth bottlenecks
- Stressed that broad-based reforms that boost productivity:
- Provide the strongest assurance that the benefits of current prosperity will be widely shared
- Contribute to reducing poverty and inequality
- Commended ongoing efforts to:
- Expand and upgrade the country’s social safety net
- Improve public transportation, education, health, and water and sanitation infrastructure
Source: Press Release No. 11/57, February 28, 2011, International Monetary Fund.