Panama as seen by FMI

Panama is facing the global financial crisis from a position of strength, reflecting several years of rapid economic growth and fiscal consolidation, as well as a strong banking system.

Monday, July 13, 2009

Although the spillovers have thus far been limited, some strains are becoming evident.

Prospects: Economic activity is set to slow significantly owing to the deterioration in the external environment, but growth is expected to remain in positive territory due to the strong growth momentum and ongoing Panama Canal expansion. The government’s financing needs for 2009 have been met. The banking system, while robust, may be vulnerable to further deterioration in international financial conditions.

Policy issues and main recommendations: The scope for countercyclical policies is limited owing to the absence of a national currency and fiscal deficit limits established by a new fiscal responsibility law. Main recommendations are: (i) adhere to the fiscal deficit mandated by the fiscal responsibility law; (ii) develop guidance to operationalize the fiscal responsibility law to allow for rapid adjustment when growth decelerates more rapidly than envisaged; and (iii) develop contingency plans to address pressures on the banking system.

2008 Article IV consultation: During the July 2008 Board discussion, Directors recommended the adoption of a stronger fiscal stance to contain excess demand and inflationary pressures while providing room for additional measures to ease the impact of inflation on the poor. Directors also stressed the need for continued financial sector vigilance. In line with these recommendations, the government maintained the fiscal accounts in surplus and stepped up the monitoring of the banking system.

Mission: The 2009 Article IV consultation discussions took place during March 11–24; the mission comprised of Ms. Gold (head), Messrs. Alichi, Dehesa, and Ms. Shi (all WHD). Mr. Wezel (MCM) joined the mission in its second week.

More on this topic

Costa Rica as Seen by the IMF in May 2017

May 2017

Forecasts are for lower economic growth this year, driven by a weakening of the terms of trade and more restrictive financial conditions, caused by the high fiscal deficit.

From a press release issued by the IMF:

I. Recent Developments

1. Both output and growth are at potential, while inflation has reemerged and is rising moderately.

Costa Rica Through Eyes of IMF in November 2014

November 2014

Although the product has remained steady in its level of potential, the country's economic prospects are not as promising due to the weakening of economic fundamentals.

From a statement issued by the International Monetary Fund (IMF):

This note summarizes preliminary findings and recommendations of the IMF staff mission that visited Costa Rica during October 28–November 11 to conduct the 2014 Article IV consultation.

IMF Concludes Review of Panama

November 2011

"Panama is still one of the fastest growing countries in the Americas."

A mission from the International Monetary Fund (IMF), led by Corinne Delechat, visited Panama from 7 to November 18 to conduct the annual Article IV Consultation (1). At the end of the discussion, Ms. Delechat issued the following statement in Panama City:

Honduras - IMF Agreement Delayed

June 2010

The Executive Board of the International Monetary Fund will decide no earlier than July.

An IMF mission conducted discussions on the 2010 Article IV consultation with Honduras during May 17-27. The mission met with President Porfirio Lobo, the government’s economic team, as well as private sector and civil society representatives.

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