Panama May Slash GDP Growth View

• Panama is eyeing a sharp cut to its forecast for 2024 economic growth after a court ruling prompted the government to order the closure of Canadian miner First Quantum's lucrative copper mine.
• Gross domestic product (GDP) growth might be 1-2% next year, down from a previous estimate of 5%, Hernan Arboleda, director of public policies at the economy and finance ministry, said in an interview on Friday. In contrast, Fitch Solutions forecasts 5.5% growth for Panama in 2023 and 3.0% in 2024.
• President Laurentino Cortizo announced last week the government will move to shut First Quantum's Cobre Panama mine, which accounts for some 5% of the country's GDP, after the Supreme Court ruled that the contract was unconstitutional.
• Panamanians have protested vehemently against the mine since October, arguing the contract was too generous, and First Quantum has since lost over half of its market capitalization.
• First Quantum said on Friday it initiated international arbitration against Panama. Some experts calculate Panama would have to pay at least $50 billion if it loses the case, which is equivalent to nearly 70% of GDP.
• Cortizo's administration is reaching out to international rating agencies to assure them that Panama still has a sound legal framework that allows investors to do business. Panama recently enacted a law banning all new mining concessions and expansions. Arboleda said the country still has other attractive investment opportunities but did not give specific examples.

(Sources: Reuters & Fitch Solutions)