Fitch revises Panama rating from negative to stable

Fitch Ratings affirmed Friday, January 28, Panama’s risk rating at BBB -, and revised the outlook from negative to stable. Panama, therefore, maintains the investment grade with the three major international rating agencies reports La Prensa.

The outlook revision reflects the continued improvement in the fiscal position and a better-than-expected recovery from the initial shock of the pandemic. The agency points out that its fiscal expectations have improved, as well as confidence in the authorities’ ability to successfully adjust the fiscal deficit.

Fitch expects the public debt to gross domestic product ratio to have a very gradual downward path and expects the government to meet the 4% deficit limit established for this year in the Fiscal Social Responsibility Law.

For the next exercises, compliance will be a greater challenge it said.

In 2020, the agency lowered Panama’s sovereign note to BBB-, with a negative outlook, and therefore a further downgrade would have led the country to lose its investment grade, a good payer seal that allows obtaining financing in better conditions.