Panama Progresses With Infrastructure and Mining

Jul 1, 2010

Panama is pushing forward on infrastructure, canal expansion and mining. The sovereign is also developing the local debt curve.

by Sean Mattson

Having turned the corner on the global recession with a still-expanding economy, nearly balanced books and three investment-grade seals of approval on its debt, Panama plans to plunge headlong this year into ambitious infrastructure spending under president Ricardo Martinelli.

The expenditure, which this year will be financed by multilaterals and local treasury issues, raises concern that Panama could lose the fiscal restraint that won it upgrades from Moody’s, Fitch and S&P. Officials are however confident that budget deficits will be within strict legal limits, affirming Martinelli will end his term in 2014 with a reduced GDP-to-debt ratio.

"It’s a government commitment," says Dulcidio De La Guardia, Panama’s matter-of-fact vice minister for finance, referring to fiscal discipline and debt reduction.

Less than a year since Martinelli took office, the white-haired supermarket magnate wants to make good quickly on projects to...

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