The fiscal deficit deepens in the first half of 2023. The political scenario remains uncertain until the September deadline for alliances
The official data for the first half of 2023 reveals an increase in the deficit compared to the previous year. However, these figures do not account for expected dividends from the Panama Canal, potential new royalties from the pending mining contract approval, or projected funds from land sales to the Panama Canal. The deficit's expansion is primarily driven by a significant increase in expenditure, which has outpaced revenue growth. Notably, Central Government revenue declined, primarily due to a loss of collections in January resulting from the extended fiscal year of 2022. Conversely, the Social Security Fund (CSS) experienced robust revenue growth, and capital outlays have seen gains correlating with increased public investment. The General Budget for 2024 raises several noteworthy points, including the projected growth in revenue and expenditure, the absence of mining contract royalties and Canal-related land sale revenues, and the administrative capacity to execute certain budget allocations. Finally, financing needs, including bond issuance, tend to exceed initial budget estimates, and external credit disbursements vary. In 2023, external financing needs are projected at $8.274 million, with a notable portion originating from global bond issuance.
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