Restructuring Frameworks: Economics and Politics
After covering an updated economic and fiscal outlook from last month, this report assesses the findings of the IMF mission to Panama and the observations and recommendations of its Executive Board. This report will also delve on three relevant issues: the continuity probe on former officials, the ongoing standoff regarding the Barro Blanco hydroelectric project, and the strike in which the main construction workers union (SUNTRACS) threatened GUPC, the contractor of the third set of locks, the key component of the Canal expansion program.
The IMF staff’s baseline projections estimate that Panama´s real GDP would have the highest growth in Latin America and one of the highest in the world at around 6%, a low inflation rate of 1%, sustainable public finances, and a decreasing current account deficit of 10.4% of GDP. These findings are all similar to our previous quarterly estimates. The policy discussion was focused on the importance of strengthening the fiscal framework, guaranteeing financial stability, and sustaining strong and inclusive growth. Although packed with useful recommendations, the IMF’s annual report fails to take into consideration the complexity of the country’s tax system.
Investigations continue on corruption allegations during the Martinelli administration. At least 29 officials and contractors are now undergoing some kind of judicial process, many of which are currently imprisoned, under house arrest, or some other measure of preventive detention. No trials have been scheduled yet.
Now read on...
Register to sample a report