Cortizo Government Will Enact Additional Stimulus In Panama, Delay Controversial Reforms

• Panamanian President Laurentino ‘Nito’ Cortizo will accelerate public investment in infrastructure and the COVID-19 recovery in the coming quarters, sidelining his previous pledge to advance fiscal consolidation measures.
• During his annual address to the country in July, Cortizo announced that his government would advance a US$12.0Bn public investment programme and a US$1.5Bn public private partnership (PPP) scheme to accelerate the country’s recovery from the pandemic.
• Fitch Solutions gave Panama a score of 60.0 out of 100 in its Short-Term Political Risk Index, tied for second among 17 markets in Latin America, due to the country’s favourable policymaking environment and business-friendly framework.
• While Cortizo’s embrace of expansionary fiscal measures and the country’s robust national vaccination programme will help bolster short-term stability, his longer-term plan to narrow the deficit and the potential for constitutional changes highlight key challenges once the economic impact of COVID-19 subsides.

(Source: Fitch Solutions)