* International credit ratings agency Moody’s Investors Service has upgraded the Panamanian government’s foreign-currency long-term issuer rating to 'Baa1' from 'Baa2', the foreign-currency long-term senior unsecured debt ratings to 'Baa1' from 'Baa2', as well as the foreign-currency long-term senior unsecured shelf ratings to (P)'Baa1' from (P)'Baa2'. A Moody’s press release cited two factors as grounds for its decision. It notes that “
Panama’s economic growth and fiscal metrics exceed that of most Baa-rated peers and prospects remain more favourable over the medium term,” stating that in Moody’s view, “
Panama’s growth outlook over the coming years will remain robust, following a deceleration in 2018 to 3.7%.” It projects GDP growth above 5% through 2022 – compared with a Baa-category median of about 3%. Moody’s cites as the other factor the fact that the government “
has strengthened its fiscal policy framework” – namely its reform of the social and fiscal responsibility law that had been in place since 2008 and “
whose performance had been mixed”. According to Moody’s, “
following changes made in 2018, the fiscal deficit target defined in the new rules will not incorporate an upward adjustment as it did in the past. This will facilitate in-year monitoring of fiscal performance relative to targets, but more importantly it will make the actual fiscal targets more transparent for policymakers and market participants”.
End of preview - This article contains approximately 231 words.
Subscribers: Log in now to read the full article
Not a Subscriber?
Choose from one of the following options