Weakening Revenues Will Weigh On Panama's Fiscal Balance In 2020

• Fitch Solutions forecasted that Panama’s fiscal deficit will widen to 6.9% of GDP, an all-time high, in 2020 due to collapsing revenues and countercyclical government spending increases. This is a revision from its previous forecast of a 5.2% shortfall.
• Despite holding a legislative majority, President Laurentino ‘Nito’ Cortizo will face significant headwinds in the coming years as he tries to return the country to fiscal consolidation.
• That said, sustained demand for Panamanian debt will likely contain borrowing costs in the coming years, even as wider deficits push government debt higher.

(Source: Fitch Solutions)