Due to the recent strike in the construction sector, the entity has reduced projections of economic growth for this year from 5.6% to 4.6%.
<span dir="ltr">However, recovery from the impact of the strike and the entry into operation of a large copper mine will lead to an upward revision of around one percentage point in the growth projection of 5.8% for 2019.
It is expected that economic growth will increase slightly to 5.1% in 2017, and about 5.5% in the medium term, supported by the expanded Canal and developing investment projects.
Panama’s economy is expected to remain among the most dynamic in the region. The economic outlook is favorable, albeit set against the backdrop of heightened external uncertainty. Panama’s growth model relies on its ability to remain a competitive and attractive destination for international financial, business, and transportation services. Continued progress with tax transparency and financial integrity are essential to preserve this growth model. Commitment to fiscal discipline and efforts to strengthen the fiscal framework and enhance institutional capacities contribute to ensuring sustainability, and need to be complemented by a comprehensive monitoring of fiscal risks. As a regional financial center, the comprehensive monitoring of systemic risks and a strong macroprudential and crisis management framework are important to safeguard financial stability.
The agency highlights the country's macroeconomic stability, while noting a slight deterioration of fiscal indicators in recent years.
From a press release issued by Moody's:
New York, October 25, 2016 -- Panama's Baa2 rating with a stable outlook reflects the country's strong economy and its broad macroeconomic stability, says Moody's Investors Service. This buoyant growth will help Panama's government reduce the nation's fiscal deficit over the coming years.
The progressive completion of major infrastructure works slowed down growth in 2013 to 8.4%, below what was achieved in the previous two years.
The Panamanian economy smoothly dodged the 2008 global crisis, and has maintained a high rate of activity through the implementation of public and private projects.
"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:
The recent increase in the value of the Costa Rican colon versus the dollar is worrisome, not only because there are no clear reasons to explain it, but also because it would be hard to contain it without causing greater problems.
In the past weeks, and without apparent reason, the price of the U.S. dollar in Costa Rica dropped considerably.
The current crisis is still unveiling and its broader regional reach and consequences are still unknown. What is known is that the impact is undeniable.
Even though the region has not experienced an immediate effect, its important to wonder how the macroeconomic adjustment may happen in our countries.
First of all, in the last years the region has experienced an improvement in its economic fundamentals, even though the external situation has dampened it, specially when compared to the rest of Latin America. This external effects are outside the reach of internal economic policy.
Generally speaking, the country risk for central american countries stays constant during the second quarter of 2008
The evaluation, done by the the most important risk rating companies, is based on the positive results reported by the treasuries of the governments, the efficient administration of public debt, and the positive macroeconomic stability of the region. However, Dominican Republic remains in the eye of some risk rating companies in relation to the issuance of a number of government bonds in international markets without complying with legal procedures.
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