Ratings company Fitch Ratings affirmed Panama's investment grade at BBB with a stable outlook, as reported by the company on Thursday, February 16.
Risk ratings are evaluations made by companies on credit quality and repayment, in this case the country, of debt taking into account internal and external factors such as fiscal management, economic indicators and projections of growth and the conjunctures Which directly or indirectly affect economic sectors.
The report talks about the country's projection of good growth, fiscal adjustments and the measures employed by the Varela administration on transparency issues, considering that they have helped to mitigate the effects of reputation damage related to the Mossack Documents Fonseca.
As for management challenges, they say the government has not
yet been able to reduce the central government's deficit from
high levels despite strong economic growth.
The report's authors explain that Panama's ratings are backed by solid and stable macroeconomic performance, which has driven the steady increase in per capita income and reflects the policies and strategic location and assets (the Panama Canal) that underpinned the High rate of investment.
According to the Rating Agency, this contrasts with institutional constraints and weak policy credibility, as the government has improved compliance with the limits of the legal deficit, but has not yet been able to reduce the central government's deficit from high levels to Despite strong growth.
Fitch estimates that Panama's real GDP growth moderated around 5% in 2016, down from its previous five-year rate of 8%, but attributed it to the decline in regional trade that affects its key logistics sector .
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