The government is pretty sure that the economy will soon achieve an investment grade ranking. In 2009 the fiscal deficit was only around 1% of GDP. The economy minister, Alberto Vallarino reckons that Panama is on the fast-track to obtaining an investment grade rating from the international credit rating agencies. Both Standard & Poor's and Fitch Ratings currently rate Panama only one notch belong investment grade and both have positive outlooks on its credit rating. Vallarino claimed that the fiscal deficit in 2009 had been US$250m less than budgeted. Tax revenues, unusually, had increased much more strongly than the overall rate of economic growth. Under the Ley de Responsabilidad Fiscal the government is not allowed, under any circumstances, to run a deficit that exceeds 2.5% of GDP. In January 2010, government revenues were up 12% year-on-year at US$292m. The deputy economy minister, Dulcidio de la Guardia, admitted, however that January's inflow was 2% lower than had been budgeted. Indirect tax revenues came to US$114m. The big problem was that the Impuesto a las Transferencias de Bienes Corporales Muebles y la Prestación de Servicios (ITBMS), (which, essentially, is a Value Added Tax) came to only US$34m. This was US$7m less than had been budgeted. Direct taxes, at US$94m were 5% lower than had been budgeted. Non tax revenues (ie Canal dues and earnings for state companies and services) were up by 7% at US$80m.
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