Caribbean & Central America - November 2013 (ISSN 1741-4458)

2014 budget approved: Panama’s national assembly approved the 2014 draft budget for US$17.76bn on 16 October, with President Ricardo Martinelli signing it into law on 21 October. Finance Minister Frank de Lima said the budget was based on a conservative estimate of GDP growth of 7.0% for 2014, with the latest July forecast from the United Nations Economic Commission for Latin America & the Caribbean (Eclac) predicting year-end growth of 7.5% in 2013. The economy grew at an annualised rate of 7.6% in the second quarter of this year, up from 7.3% during the first three months, although some way below the overall 2012 rate of 10.7%. De Lima also highlighted that the budget took into account the limit of 2.7% of GDP for the fiscal deficit, in accordance with the country’s social and fiscal responsibility law. Of the US$17.76bn, US$9.56bn will go to central government and US$4.5bn to decentralised government institutions, which includes the Panama Canal authority. The budget stipulates that US$8.84bn is to be spent on social services, US$1.69bn on infrastructure and US$1.99bn on financial services. Meanwhile US$1.43bn has been designated to non-specific areas of the budget, which includes the total amount of financial resources required for the servicing of public debt. The government was also quick to highlight that social spending accounts for 49.8% of the entire budget of which US$3.5bn will go towards the health sector, US$1.87bn towards education and culture, and US$1.77 towards social security.

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