Panama risks becoming ''fallen angel'' - Bank of America
Date
6/8/2021 11:18:27 PM
(MENAFN- Newsroom Panama)
BofA Securities, the investment banking division of bank of America, warns that Panama risks becoming another Latin American ''fallen angel”.
Some of the report's conclusions are a direct consequence of the economic slowdown caused by Covid-19; while others are the product of structural lags that now put the country in check.
"In our opinion, three variables will determine whether Panama becomes a fallen angel or not: economic growth, pension reform, and -why not- fiscal", it points out.
Comparing the country's performance with a soccer game, BofA Securities specified that in 2021, Panama is scoring a goal in its favor, with the resumption of economic activity -after the longest confinement in the region-, but on the other hand, it is receiving two goals against. Although "there is time" to overcome the scoreboard.
One of the goals against has to do with the disappointing financial results of the first quarter of 2021 and that the government has not yet begun to tighten its belt to curb spending.
The second goal against the party for maintaining investment grade is ''the fact that the Government has neither a pension reform plan nor a fiscal adjustment plan. This is something that can make markets increasingly nervous. And it puts Panama at a disadvantage, from now on ”.
Still, BofA Securities has made an upward revision of its gross domestic product (GDP) growth forecasts for 2021 and 2022.
The GDP growth estimate went from 8% to 9.5% for 2021, and from 4.5% to 5% in 2022. The analysis takes into account the performance of data associated with trade (exports and imports), ports, the Canal, and the Colon Free Zone, in addition to the production of food, cement, electricity production, mobility, and consumer confidence.
MENAFN08062021000218011062ID1102234869
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.