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Panama Country Risk Report Q4 2018

Panama Country Risk Report Q4 2018

Key View:

Panama will see strong economic growth in 2018 and 2019 as private consumption and public investment both pick up.

The fiscal deficit will modestly narrow in the coming quarters as strong economic activity and rising trade through the Panama Canal support revenue growth. Elevated public infrastructure spending, however, will prevent significant fiscal consolidation.

The May 2019 general election in Panama will be closely contested between the country's three major parties. While corruption will be be a major concern for voters, it is unlikely that the next president will alter Panama's pro-growth economic policies.

Robust services export growth will support Panama's current account balance in the coming years. Foreign investment inflows will provide adequate support to Panama's external position.

Key Risks

A worsening of trade relations between the US and China could severely undermine government revenues, which are supported by Panama Canal transit fees.

Lingering corruption concerns regarding the Panama Papers and Odebrecht scandals negatively affect investor sentiment towards Panama, putting the country's infrastructure programme and financial services sector at risk.

Over the long term, an increasingly close economic relationship with China could pose upside risks to our growth outlook as stronger trade relations boost export volumes and investment helps to drive expansion of the construction sector.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Panama Will See Uptick In Growth In Years Ahead
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Fiscal Policy And Public Debt Outlook
Strong Growth To Help Contain Panama's Fiscal Deficit
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
10-Year Forecast
Panama's Economy To 2027
Transport-Related Services Will Sustain Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Panama Country Risk Q4 2018ContentsPolitical Outlook
Domestic Politics
No Clear Favourite In 2019 Panamanian Election
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Continuity A Strength, But Public Trust To Be Tested
Global Macro Outlook
Strong Growth, But Greater Headwinds Too
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: PANAMA – MACROECONOMIC DATA & FORECASTS

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