National debt near doubled in 10 years
PANAMA’S NATIONAL debt almost doubled between 2005 and 2015, according to a report from the Ministry of Economy and Finance.
At the end of 2005, with Martín Torrijos in power, the balance of the debt surpassed $10.2 billion. And 10 years later, at the end of 2015, the debt amounted to more than $20.2 billion.
The government of Ricardo Martinelli (2009-2014) accounted for most of the increase, adding $7.2 billion But the current administration has maintained the upward trend, with the public debt totaling $21.5 billion as of the end of September.
As the economy grew at a strong pace in 10 years, the relationship between debt and gross domestic product fell from 66 percent in 2005 to 38.7 percent in 2015.
The increase is debt has meant the government’s interest payments have increased.
In September, it paid $308.8 million in debt service.
The main instrument to finance the debt used by the government is global bonds, which totaled $11.4 billion at the end of September.
Other instruments include loans from multilateral bodies ($4.1 billion), treasury bonds ($2 billion) and treasury notes ($1.9 billion).
While the total debt of the country has grown, it has shrunk when compared with the size of the economy.
This has meant that the country has the ability to accumulate more debt.
Another indicator that reflects the health of the economy is that current revenue from the public sector can cover up to 10 times the debt obligations of the state.
Unjustifiable
Economist and lawyer Fernando Gómez Arbeláez noted that the debt-to-GDP ratio has not improved in recent years, “something that is unjustifiable in times of economic growth,”reports La Prensa.
He also noted that the government has excluded liabilities such as the bonds issued to cover the expansion of Tocumen International Aiport and for the purchase of the corridors by the National Highway Company.
Those decisions have not impacted its bond rating, however, as it is one of the highest-rated countries in Latin America.
