Panama’s economic performance over the past decade recognized as strongest in the region
Panama City (June 14, 2016) – After the conclusion of the Article IV Consultation with Panama on May 23, 2016, the International Monetary Fund (IMF) announced that Panama’s economy has enjoyed the highest growth in the region over the past decade, and will remain one of the region’s strongest over the medium term. Over the last 15 years, Panama’s economic growth has averaged 8.2%, and its service-based economy continues to be particularly strong in port infrastructure, financial services availability, banking system strength, foreign direct investment, transference of technology and quality of the investment environment, according to the IMF report.
With an overall fiscal deficit of 2.8% of GDP, non-financial public sector debt of 39% of GDP, and a current account deficit of 6.5% of GDP in 2015, the IMF also highlighted Panama’s economic performance and forecasted the following over the medium term:
- Overall fiscal deficit lower than 1.2% of GDP
- Debt of the non-financial public sector lower than 35% of GDP
- Current Account Deficit lower than 3% of the GDP
In their announcement, the IMF also recognized Panama’s improvements and progress on financial transparency, and highlighted some of the actions taken by President Varela’s administration to fight tax evasion, such as the removal of Panama from the Financial Action Task Force (FAFT) “gray list”, the progress in the peer review process of the Organization for Economic Development and Cooperation (OECD), the country’s commitment to strengthening their network of treaties for the exchange of tax information, and the announcement to join the Common Reporting Standard (CRS) of the OECD through bilateral reciprocal treaties.
The IMF also stated that vibrant economic growth is expected to be maintained over the medium term by „the increase in canal transit, a dynamic service sector, and investments in the energy, mining, and logistics sectors“.