Warnings Over Panama's Increased Public Spending

Economists recommend fiscal discipline in order to better address the economic environment in the coming years and avoid the credit risk being raised due to increased borrowing.

Tuesday, October 21, 2014

The recent bond issue of state debt by $1250 million on the international market and the consequent increase in total public debt should be a wake up call for the government, which should be able to maintain an adequate balance in the relationship between debt and Panama's Gross Domestic Product.

Juan Jované, an economist who was a candidate for president of the Republic of Panama, told Laestrella.com.pa that "... 'we can not continue to increase the debt at the rate we're doing'."

The president of the National Association of Economists, Raul Moreira said that "... it was understood that the debt was taken on because of the fiscal gap which the government found itself with when it came to power last July 1, but this should not be a policy to be followed in the coming years. 'Fiscal discipline has to come back from its holidays.'"

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