Press Release No. 11/57

Press Release: Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of His Visit to Panama

February 28, 2011

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Panama City at the conclusion of his visit to Panama:

“It has been a great pleasure for me to visit Panama—my first visit as Managing Director of the IMF. I met President Ricardo Martinelli Berrocal, Finance Minister Alberto Vallarino Clement and his team, and financial sector authorities. I would like to thank them for their warm hospitality, and for the interesting and productive discussions we had.

“Building on a remarkable economic performance over the last few years, Panama is expected to remain one of the fastest-growing countries of the Americas. The economy grew in 2009, when output in the region shrunk, expanded by 7 percent in 2010 and is expected to continue to grow rapidly in 2011. Prudent macroeconomic policies, a strong banking system and dynamic investment in infrastructure have been critical for this remarkable performance.

“In our meetings, I emphasized to President Martinelli and Minister Vallarino that, notwithstanding the strong anchor of the U.S. dollar, inflationary pressures could intensify owing to the impact of higher world commodity prices, low unemployment and the ambitious public investment program. I encouraged the economic team to build on the recent tax reforms and continue with their policy of gradual fiscal consolidation in order to keep domestic demand in check and prevent overheating. I also welcomed the authorities’ plans to deepen the financial sector’s resilience to shocks.

“I welcomed the government’s long-term economic and social strategy, which aims at expanding economic opportunities and reducing growth bottlenecks. I stressed that broad-based reforms that boost productivity provide the strongest assurance that the benefits of the current prosperity will be widely shared by the population, and contribute to reducing poverty and inequality. In that regard, I commended President Martinelli for the ongoing efforts to expand and upgrade the country’s social safety net and to improve public transportation, education, health, and water and sanitation infrastructure.”