Moody’s Confirmation of the Investment Grade is a Clear Sign of International Confidence in Panama’s Economic Potential

The Ministry of Economy and Finance reported this Wednesday that the international rating agency Moody’s Investors Service has confirmed Panama’s sovereign risk rating at Baa3, maintaining it within investment grade. The outlook remains negative, reflecting the country’s fiscal challenges, but recognizing its economic resilience and commitment to macroeconomic stability.  According to the most recent report published on July 3, 2025, Moody’s highlights that the Panamanian economy maintains solid structural fundamentals, including: a history of sustained high economic growth, a services economy with strong investment, a favorable debt profile, no exposure to foreign exchange risk, and stable flows from the Panama Canal, which has shown signs of recovery following the adverse weather effects of 2024.  The report also highlights that, despite the deterioration of some fiscal indicators in 2024, the government has demonstrated political will to address structural challenges, as evidenced by reforms to strengthen the sustainability of the pension system and the recently announced budget cuts of $1.9 billion.

“Moody’s confirmation of the investment grade is a clear sign of international confidence in Panama’s economic potential and in the government’s commitment to responsible management of public finances,” said Minister of Economy and Finance Felipe Chapman.  The head of the MEF emphasized that they will continue to promote reforms that strengthen fiscal credibility, improve budget transparency, and guarantee a sustainable debt trajectory.  Moody’s also highlights that GDP growth in the first quarter of 2025 was 5.2%, with a notable recovery of the Panama Canal, whose monthly revenues averaged $340 million through May, exceeding the 2024 average.  “The National Government reiterates its commitment to a prudent fiscal policy, efficient public spending, and attracting investments that drive economic growth and social equity,” the statement said.  The report emphasizes that, despite the deterioration of some fiscal indicators in 2024, the government has shown a willingness to address structural challenges.