Panama: Staff Report for the 2011 Article IV Consultation

IMF Staff Country Reports, April 10, 2012

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Panama: Staff Report for the 2011 Article IV Consultation

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Bibliographic details

• Published: April 10, 2012
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781475503142.002

Executive summary

• Panama’s economy has rebounded strongly from the 2009 slowdown and is one of the fastest-growing in the region.
• Rapid growth and prudent fiscal policy have lowered public debt to less than 40 percent of GDP.
• Rating agencies have placed Panama’s sovereign debt one notch above investment grade.
• The neutral fiscal stance envisaged for 2012–13 is broadly appropriate, though a tighter stance would have been preferable to rebuild buffers and contain inflation.

Key findings

• Growth: Panama is characterized as "one of the fastest-growing in the region" following the 2009 slowdown.
• Public debt: "less than 40 percent of GDP."
• Sovereign credit: Rating agencies placed Panama’s sovereign debt "one notch above investment grade."
• Fiscal stance: A "neutral fiscal stance envisaged for 2012–13" is judged broadly appropriate; however, a tighter stance would have been preferable for rebuilding buffers and containing inflation.

Policy recommendations and assessment

• Maintain prudent fiscal policy to preserve the decline in public debt and sustain sovereign credit improvements.
• Consider adopting a tighter fiscal stance than neutral in 2012–13 to:
  • Rebuild fiscal buffers.
  • Contain inflation.

Subjects and keywords (as listed)

• Subjects: Asset and liability management, Banking, Economic sectors, Expenditure, Fiscal policy, Fiscal stance, Liquidity, Public debt, Public investment spending, Public sector
• Keywords: Caribbean, Central America, CR, double-taxation agreements, FDI, Fiscal stance, Global, IMF staff estimate, ISCR, largely not observed, Liquidity, Panama Canal expansion, Panama's investment performance, Public investment spending, Public sector, South America, South Asia, youth unemployment

Content in this bundle

• Panama: 2011 Article IV Consultation; IMF Country Report 12/83; January 24, 2012
  • Panama: 2011 Article IV Consultation; IMF Country Report 12/83; January 24, 2012 (Markdown version)
  • Panama: 2011 Article IV Consultation; IMF Country Report 12/83; January 24, 2012 (PDF)