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LatinNews Daily - 16 July 2018

In brief: Panama

Panama: Panama’s President Juan Carlos Varela has ordered the Autoridad de los Servicios Públicos (Asep), the country’s public services regulator, to “immediately suspend” the increase in electricity tariffs for some consumers for the second half of 2018. The tariff adjustment was announced by Asep on 5 July and had been met with public protests and discontent from unions and private sector lobby groups. Panama’s chamber of commerce, industry, and agriculture (CCIAP) for example, claimed that the increase in tariff prices owed to “irresponsibility and lack of timely decisions on the part of different government administrations”. In response to the public anger, President Varela stated in a public announcement that he had asked the finance ministry to assume the cost of the tariff increases until the national assembly passed an exemption which would enable the government to increase the fiscal deficit by 1% of GDP or US$300m for 2018. The increase in the fiscal deficit was presented to the opposition-controlled national assembly also on 5 July and has been justified by the government as a necessary measure for spurring on economic growth through government spending. This followed a downward revision of Panama’s growth forecast for 2018 from 5.6% to 4.6% by the International Monetary Fund’s (IMF) on 1 June.