This 2003 Article IV Consultation for Panama reports that the medium-term outlook is sound, assuming continued pursuit of prudent fiscal policies and growth-enhancing structural reforms. Sustained compliance with the fiscal responsibility law will require structural reforms, including improvement of tax administration. Comprehensive reform of the pension system is needed to ensure its viability. The authorities are taking some administrative steps to reduce the deficit, but comprehensive reform will have to be done by the new government.
This 2004 Article IV Consultation for Panama reports that the medium-term outlook is encouraging, assuming implementation of the authorities’ fiscal program, which should put the public debt ratio on a steadily declining path. The banking system experienced a substantial recovery in 2003–04, and the financial system remains essentially sound, with favorable performance indicators and a strong regulatory framework. An expansion of the Panama Canal at an estimated cost of more than 30 percent of GDP could, if approved in a national referendum, have a far-reaching impact on the economy’s growth prospects.
This Selected Issues paper for Panama reports that the administration is developing a strategy to enhance growth and competitiveness in the Panamanian economy. Corruption is perceived as a widespread phenomenon that has affected both private and public sectors in Panama at various levels of decision making. Even though Panama currently attracts substantial foreign direct investment, corruption may prove an obstacle to a medium-term growth strategy based on foreign investment. One important component of Panama's medium-term strategy is the prospect of a free-trade agreement with the United States.