IMF Staff Country Reports

Panama: 2024 Article IV Consultation-Press Release; and Staff Report

June 27, 2024

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International Monetary Fund. Western Hemisphere Dept. "Panama: 2024 Article IV Consultation-Press Release; and Staff Report", IMF Staff Country Reports 2024, 188 (2024), accessed November 21, 2024, https://doi.org/10.5089/9798400279867.002

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Summary

The 2024 Article IV Consultation discusses that Panama grew very rapidly in the two decades preceding Coronavirus disease 2019 but was hit very hard by the pandemic. Between 1994 and 2019, gross domestic product (GDP) per capita increased from 33 percent of US GDP per capita to 48 percent. Rapid growth was driven by an unprecedented construction and investment boom that included major construction projects, such as the enlargement of the Panama Canal and the Tocumen airport, and the expansion of the services and logistics sectors that benefited from those projects. The government aims to reduce the fiscal deficit to 2.0 percent of GDP in 2024. As budgeted spending is not consistent with this target, the government intends to meet the target by keeping public investment well below the budget, but this would require an unduly large compression of investment when unemployment is expected to increase and growth to slow down. In order to maintain room for investment, increased revenue mobilization is needed. In order to safeguard financial stability, it is essential that banks remain well capitalized and liquid. Strengthening human capital and governance will help sustain convergence. Continued implementation of the national statistical plan will improve the quality and timeliness of key macroeconomic data.

Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Crime, Economic sectors, Public debt, Public sector, Revenue administration

Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), Caribbean, Central America, CFZ import, Deficit target, Global, IMF staff calculation, Inter-American Development Bank, Public sector, Staff appraisal, Superintendencia de Bancos de Panama, Unit of account

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