Panama President Mulino Addresses Deficit Left by Previous Administration

The US bank known as Citi Panama has been involved in the country’s economic development, starting with the funding of the construction of the Panama Canal in 1904 through the former International Banking Corporation.  Citi Panama has continuously funded other public works throughout the years, such as the highway network, hospitals and the recent construction of the country’s first metro system.

Citi, believes it is feasible for Panama to reduce state subsidies to improve revenues, while more profound changes in fiscal matters are being analyzed.  According to projections by the American bank Citi, Panama is expected to grow at a rate of 2.4% this year, while for 2025 it projects a rebound to 4.5%.  Citi’s projections are in line with estimates from the World Bank and the International Monetary Fund, which point to gross domestic product (GDP) growth of around 2.5% for this year. 

Esteban Tamayo, chief economist for Central America and the Andean countries at Citi, commented during a virtual event that the markets have reacted positively to the messages sent by the new government, especially by the Minister of Economy and Finance, Felipe Chapman, on the management of the State’s accounts.  “The response has been positive. The country risk is lower than it was two months ago and now the international markets and risk rating agencies are waiting for the plan that the administration of President José Raúl Mulino will implement in the short and medium term,” said Tamayo.  The Mulino government needs to address the deficit left by the previous administration.  The Panamanian government will have to ask for nearly $3 billion to pay its obligations.