Panama: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Panama

International Monetary Fund

No 2025/245, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2025 Article IV Consultation discusses that the economy is recovering from the impact of the Cobre Panamá mine closure. Gross domestic product growth is projected to increase to 4.5 percent in 2025 as the impact of the mine closure diminishes and non-mine economic sectors continue to grow. The economy is expected to continue its recovery, but the outlook is subject to significant downside risks and a high degree of uncertainty. Post-pandemic inflationary pressures have abated. Inflation has turned negative, dropping to −0.2 percent year-on-year at the end of 2024 and further down to −0.7 percent year-on-year by May 2025. Full implementation of the spending reduction plan approved by the cabinet would bring the 2025 fiscal target within reach. The pension reform is a welcome adjustment that addresses the financial shortfalls of the defined benefit scheme. The recent pension reform rightly addresses the defined-benefit scheme’s funding shortfalls; further measures will be key to long-term sustainability.

Keywords: Panamanian authorities; market expectation; government process; Sta TA; accession to Mercosur; unit of account; macroeconomic performance; Anti-money laundering and combating the financing of terrorism (AML/CFT); Public sector; Central America; Global; Caribbean (search for similar items in EconPapers)
Pages: 99
Date: 2025-08-25
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