LatinNews Daily - 30 July 2025

*Panama’s ministerial cabinet has approved the government’s draft budget proposal for 2026, which plans for US$34.9bn in spending, up by US$4.2bn on the 2025 budget. A statement from the finance ministry emphasised that this increase is “mostly driven by unavoidable State obligations such as the payment of inherited debt, interest, and extraordinary contributions to the CSS [social security system], which do not represent the new expansion of programmes, but rather reflect the rigidity of public spending”. Economy and Finance Minister Felipe Chapman said that the non-financial public sector debt is predicted to fall to 3.5% of GDP in 2026, down from 4.0% in 2025 and 7.35% in 2024. The statement highlighted that public debt has quadrupled from 2019-2024 rising from US$26.6bn to US$51.8bn, with President José Raúl Mulino’s government blaming previous administrations for a looming US$3.7bn year-on-year rise in repayments in 2026 as debts fall due. The 2026 budget does however make room for US$11.0bn in planned public investment, which the finance ministry described as a record amount.

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