GlobalSource Partners | Country Insights

Two tasks were pending for December 2024: (1) the Government's Economic Program (PEG), which we will analyze in detail in early January once it is officially published. It will form the basis for our projections for the next five years; and (2) the CSS reform, particularly the pension plan within...

The reform of the pension system goes to the Legislative Assembly

PANAMA · Report · 15 Nov 2024 · 1 response

The reform of the CSS legislation, in particular the pension system, is the most recent initiative of the Mulino administration, after the Fiscal Responsibility Law enacted at the beginning of the month (which suffered minor changes in the legislative) and the Budget Law, which was changed substa...

The 2024-2025 economic reform's timeline: two steps forward, still four to go

PANAMA · In Brief · 01 Nov 2024

Summary We discuss the key reforms that will take place during the Mulino administration. The Fiscal Responsibility Law (LRSF) and the Public Sector Budget for 2025 were approved last week, with political setbacks. The Legislative Assembly (AN) introduced changes in the proposal of the Ministry o...

Another setback for the Executive: the Budget Committee returns the MEF Proposal... we analyze the options of both groups

PANAMA · In Brief · 23 Oct 2024 · 1 response

The 2025 budget project, approved by the cabinet on October 15 and presented the same day to the Assembly, was returned (not rejected) after the first debate in the Legislative Assembly. The 15 members of the budget committee requested the Minister of Economy and Finance to modify his proposal to...

New Fiscal Social Responsibility Law is approved by the Cabinet and submitted to the Legislative Assembly

PANAMA · In Brief · 18 Oct 2024

On October 14, the Assembly received the proposal for a new fiscal law (LRSF in Spanish). This law is necessary to establish the deficit ceilings before enacting the 2025 budget (which we will comment on in an upcoming report). This new version of the LRSF includes three topics within the same bo...

The order of factors does affect the product: a defeat for the Executive in the Assembly

PANAMA · In Brief · 11 Oct 2024 · 1 response

This week, the Executive Branch presented its proposal for the 2025 national budget to the Legislative Branch, which was challenged on Thursday by the Budget Commission for three reasons: (1) it was not submitted on time, as the Constitution (Article 184) requires the proposal to be sent within t...

The challenges of the pension system and Mulino's path to reform

PANAMA · Report · 16 Sep 2024

President Mulino made several important announcements on Thursday, September 12, focusing on the path of the pension reform and placing strong emphasis on measures to improve the healthcare system, which could lead to political gains. On the pension system, Mulino confirmed a dialogue table start...

Mulino faces five challenges over the next eighteen months. Chapman taps the local market. The principle of specialty that Martinelli is pursuing may be a formidable obstacle to the path of reforms

PANAMA · Report · 26 Aug 2024 · 1 response

The Mulino administration has inherited five critical challenges that impact the future of the country's public finances and the economy as whole: 1) the revision of the sub-system of defined benefits of the state pension program; 2) a tax reform; 3) the decision about the copper mining project, ...

Fiscal accounts for the semester, Chapman’s financial proposals and their implications, Mulino’s announcements, and important appointments to come

PANAMA · Report · 12 Aug 2024 · 1 response

The fiscal accounts for the first semester, published last week, align with our projections for a Non-Financial Public Sector (NFPS) deficit close to 8% of semiannual GDP according to our estimates, reaching 3.96% of the projected GDP for the entire year. Economy and Finance Minister Felipe Chapm...

Growth and challenges ahead: the 2024-2025 economic forecast

PANAMA · Forecast · 26 Jul 2024

The economic outlook for 2024-2025 predicts real GDP growth of 2.2% in 2024 and 4.0% in 2025, supported by major investments and recovering Canal operations. Key risks include the effects of the cessation of copper mining, high interest rates and fiscal deficits. Inflation will rise slightly, and...

Changing things so everything stays the same

PANAMA · In Brief · 23 Jul 2024

After the May 1 elections, in which the independent caucus won the most seats (23/70) but not enough to form a majority (36/70), the selection of the National Assembly committees took place, which are crucial in shaping the country’s political agenda. The outcome was a resounding victory for the ...

The legislative election and the Mulino inaugural speech: we give the benefit of the doubt with mixed feelings

PANAMA · In Brief · 02 Jul 2024 · 1 response

As anticipated, the ad-hoc coalition that favored the government of José Raúl Mulino won the Presidency of the Assembly with 44 votes by electing Dana Castañeda, a last-minute candidate, supported by Ricardo Martinelli directly and (his) Realizando Metas party as a group. This election confirms M...

Events of July 1: What Should We Anticipate?

PANAMA · In Brief · 26 Jun 2024

Election of the Legislative Assembly's Directive Board Out of the 71 legislators established by the Constitution, only 70 will be present for the election of the directorate of the National Assembly (president, vice presidents, and general secretary). The candidate Zulay Rodríguez, who was defeat...

The economy slowed through April while Mulino builds his team with pro-market figures. We discuss the Mulino-Martinelli relation and its implications. The July election of the new Legislative Directorate is key for reforms.

PANAMA · Report · 14 Jun 2024

First quarter data, as well as data from April, indicate that exports and total investment fell, while consumption and imports increased. The IMAE showed a decrease of 2.1% in March and YoY cumulative growth of 0.04% in the first quarter. We forecast 2% real growth for the remaining quarters and ...

Mulino's cabinet is set, but the composition of the legislative Assembly is in doubt. Fiscal weakness and slow growth are challenges for the next administration.

PANAMA · Report · 31 May 2024 · 2 responses

With less than six weeks to go until the new National Assembly is installed (and 25 days after the general elections on May 5), we still do not know the Assembly's definitive political composition. This uncertainty is mostly due to the strategy by a group of losing candidates and parties from the...