LatinNews Daily - 7 October 2024

*Panama’s Economy & Finance Minister Felipe Chapman has presented the government’s proposed 2025 budget which is for US$26.08bn, a 15% drop on the 2024 budget. According to an official press release, the proposed budget is based on GDP growth estimates for Panama of 5% for 2025, based on projections by the International Monetary Fund (IMF) which aligns with estimates from organisations like the World Bank (WB) and United Nations Economic Commission for Latin America & the Caribbean (Eclac). The right-of-centre Realizando Metas (RM) government, which is led by President José Raúl Mulino who took office in July, cites an “uncertain” global economic scenario while the IMF is forecasting that Panama’s GDP will grow 2.5% in 2024, down from 7.3% in 2023. This slowdown is attributed in part to the closure of the massive Cobre Panamá copper mine last year, following the supreme court’s decision to strike down a new contract amid public anger. Chapman said the smaller budget reflected the need to take “responsible decisions” due to the situation inherited from the previous Partido Revolucionario Democrático (PRD) government led by former president Laurentino Cortizo (2019-2024). Chapman said the previous government had left the country with the deficit for the nonfinancial public sector (SPNF) running at 3.96% of GDP as of June 2024, and over-indebtedness of 10.2% above the limit permitted by the law of social fiscal responsibility. Chapman said the budget’s principal objective is to be “consistent with a strategy of reducing the fiscal deficit while maintaining public investment in key areas”. It now goes before the 71-member unicameral legislature where RM lacks a majority.