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 by Marco Fernandez

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, today in limbo; 4) the expansion of the Panama Canal watershed, necessary for the economic sustainability of the waterway, as well as the provision of water to the metropolitan area of Panama City; and 5) the perspective of a sovereign downgrade. In this report, we review the possible timing to address these issues. In other news, the MEF issued US 188.69 million in Panotas (5 years) at a yield of 6.72%, which represents a 3.02% spread over the U.S. Treasury benchmark. This spread is slightly higher than the 2.38% spread of April's Panotas, although the yield is lower (7% in April). In politics, Martinelli is advocating for the Foreign Affairs Ministry to accept the Principle of Specialty in his corruption case. We discuss the implications of this.

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