Panama Central Government revenues contracted by 8.6% in 2009

Panama Economy Insight estimates that Non Financial Public Sector (NFPS) had a deficit by 2.3% in 2009. In fact, the Government announced on its website that the NFPS deficit was by 2.3% from January to September of 2009. Government sector value added expanded by 3.1% in the first three quarters of 2009, according to GDP data published by the Comptroller on its website. Meanwhile, the revenues of the Central Government contracted by 8.6%, year on year, according to data published by Ministry of Economy and Finance on its website. The previous Government, which concluded its mandate at the end of June, prepared the 2009 budget based on an economic growth of 7%, which was too optimistic with regard to the true situation. At that time, the effects of the global downturn were not very clear and International Monetary Fund predicted a growth of 7% for Panama. The public debt as percentage of GDP should be increased from 45% in 2008 to 47.6 % in 2009 because NFPS deficit, as well as also due to debt of the Financial Stimulus Programme. By 2010, Panama Economy Insight forecasts that the NFPS will experience another deficit by 2.1%, because economic growth of just 2.3%. The deficit would fall to less than one percentage point of GDP in 2011 and 2012 and debt as percentage of GDP will reduce to 40.6% of GDP in 2012 because rapid economic expansion.