Increasing Stimulus Spending In Panama Will Expand Fiscal Deficits

• Panama’s fiscal deficit will widen in the coming quarters as stimulus measures designed to mitigate the economic impact of the Covid-19 (coronavirus) pandemic and subdued revenues weigh on the fiscal balance.
• That said, sustained interest in Panamanian debt and a long-term commitment to fiscal consolidation will help keep borrowing costs modest in the coming years.
• Fitch has revised its 2020 and 2021 fiscal deficit forecasts to 4.8% and 4.6% of GDP, from 2.9% and 2.6% previously, significantly wider than Panama's estimated 3.1% shortfall in 2019.

(Source: Fitch)