Panamanian Elections Unlikely to Prompt a Major Shift in Policy

• Panamanians will go to the polls on May 5, 2024, bringing to an end President Laurentino Cortizo’s (who is constitutionally barred from running) five-year stint in office.
• Cortizo's tenure has been a turbulent period for Panama. Nationwide protests broke out in both 2022 and 2023, nominally driven by the public’s frustration with cost-of-living pressures (2022) and concerns over the environmental impact of the Cobre Panamá mine (2023).
• However, the root cause of both bouts of social unrest was due to the lack of opportunities available to the bulk of Panamanians, who lack the skills to find work in the thriving professional services sector.
• That said, while the presidential contest itself is hard to call, the outlook for policy looks less uncertain. The race itself is wide open, but the implications for policy continuity are unlikely to be very significant, with the majority of candidates committed to a pro-business agenda.
• While the outlook appears positive for business in the near term, Fitch is sceptical that the electorate will be happy to persist with the status quo. Until the employment issue is resolved, it is expected that social tensions will remain elevated and that large, nationwide protests will become a more frequent phenomenon in the coming years.

(Source: Fitch Solutions)