Panamanian Economy Praised In IMF Review

by Mike Godfrey, Tax-News.com, Washington

29 November 2004

The International Monetary Fund has issued an upbeat assessment of the Panamanian economy, praising the newly-elected government of Martin Torrijos for actions taken to contain public spending, reform taxes and encourage economic growth.

“The mission welcomed the rapid growth of the economy, and noted that output would likely grow by about 6 percent in 2004, led by export-oriented services and a boom in construction that has been stimulated by temporary tax incentives,” the IMF explained in a statement relating to the annual Article IV review of Panama’s economy.

Specifically, the IMF praised the new administration for the emphasis placed on strengthening public finances and improving fiscal transparency through the containment of the fiscal deficit, proposals to restrain expenditure in the 2005 budget, and planned tax reform.

The multilateral body added:

"The mission observed that the government's commitment to prudent fiscal policies is part of a broader strategy for promoting sustained economic growth, including policies for good governance, further integration in the regional and global economy, and improving the international competitiveness of Panama, particularly in the export-oriented service sectors.”

Discussions for the Article IV consultation will conclude in the first half of December 2004, in a meeting to be held with the Minister of Economy and Finance, Dr. Ricaurte Vásquez.

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