IMF Staff Concludes Visit to Panama

• A staff team of the International Monetary Fund (IMF), led by Alejandro Santos, visited Panama during July 17-23, 2019, on an invitation from the Panamanian authorities.
• Santos said, “while Panama remains among the most dynamic economies in Latin America, the economic recovery has been slower than anticipated. Real GDP grew at an annual rate of 3.1% in the first quarter of 2019 (compared to 4% in the same period of last year), due to a softening in construction and services.
• More recent data pointing to a continuation of a sluggish recovery, lead the IMF to revise down its growth projection for 2019 to 5% (from 6% estimated in the February visit).
• Panama’s fundamentals remain solid, with the economy expected to recover and converge to its potential growth of 5.5% by next year, and inflation edging up to 2% over the medium-term.
• Authorities also expect to reduce the fiscal deficit by over 2% of GDP in the next two years, allowing Panama to observe the deficit limit under the fiscal responsibility law of 1.75% of GDP by 2021.

(Source: IMF)