Multiple challenges for Panama government in 2020

 
2,416Views 3Comments Posted 01/01/2020

Some of the main challenges facing the Lorentino Cortizo government in  2020 include:.

The debt of the Non-Financial Public Sector which reached the historically high figure of  $30.370.4 billion in November 2019,

. Between October and November alone the debt increased $ 1,728.4 billion.

The strategy of the Ministry of Economy and Finance (MEF) has been to contract debt to pay debt. In other words, money has been borrowed to settle outstanding debts from suppliers of the State, and even the Colon Free Zone.

This has been achieved through the issuance of Treasury Bonds and loans, which the MEF highlights were in many cases achieved with low rates. It is money that Panama will have to pay later and that could limit the investment capacity during the coming years, especially if it is not accompanied by solid economic growth says a TVN report.

Panama needs access to international financing and positive evaluations of international organizations. Along these lines, the government presented to the Assembly bills such as the creation of a Superintendency of Non-Financial Subjects that, together with other actions, seek to meet the standards against money laundering and terrorist financing of organizations such as the ECD and the International Financial Action Task Force (FATF).

Economic growth The annual Gross Domestic Product (GDP) of the country was 3.7% in 2018 and the MEF estimates that it will be around 3.5% by 2019.

Unemployment was 7.1%, according to the last measurement made in August 2019. Informal employment increased 1% between 2018 and 2019, and there are currently 716,000 people who remain without formal jobs

On the other hand, foreign direct investment grew. In the first months of 2019, it increased by 15.9%, compared to the same period of 2018. In total, from January to September, $4,735.2 billion in foreign investment entered the country, according to the Comptroller General.

The main challenge for 2020 will be to generate jobs and boost the economy, fulfilling the commitments of debt acquired and fiscal discipline. The government has put on the table tools such as Public-Private Partnerships. It will be necessary to see the effect of the projects that arise, and to determine if they manage to benefit the majority of the Panamanian population.