LatinNews Regional Monitor: Caribbean & Central America - 25 September 2019

* The Guatemala-based think tank Central American institute of fiscal studies (Icefi) is warning that abrupt and significant reductions in public spending and capital expenditure in the Panamanian government’s FY2020 state budget proposal will negatively affect the country’s economic growth. The proposed budget is for US$23.32bn, US$350m less than the previous administration’s budget for FY2019 of US$23.67bn. Icefi says that while the draft budget proposed by President Laurentino Cortizo aims to avoid fiscal deficit elevation and greater levels of debt, it envisages less public investment, which will have a negative impact on Panama’s economic activity. According to Icefi, the government is sacrificing the state’s investment expenditure in place of undertaking more robust measures to increase revenue. Icefi will carry out a more in-depth social analysis of Panama’s 2020 draft budget in October.

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