Panama's Fiscal Deficit Will Remain Wider Following Recession, Deficit Cap Revision

• Fitch Solutions forecast Panama’s fiscal deficit will narrow to 7.4% of GDP in 2021, from an estimated 10.3% in 2020, amid a rebound in economic activity that will support revenue growth.
• However, the agency has revised its 2021 forecast from 6.7% previously, due to limited prospects for expenditure consolidation and revisions to the country’s deficit cap.
• Despite wider deficits over the coming years, it expects investor appetite for Panamanian assets will limit borrowing costs and contain financing risks.

(Source: Fitch Solutions)