BRIEFS: Economy

Panama could get bond rating boost

Due to its growing economy, Panama is moving closer to receiving an “investment grade” bond rating .

This level would allow the country to receive better interest rates on its outstanding debts.

While the country's deficit has increased in the last four years, the expanding economy has outpaced it, reducing the gross domestic product (GDP) to debt ratio from 71 percent in 2004 to its current level of 47 percent.

In addition, the Fiscal Responsibility Act that was passed this year allowed the government to adjust the way it calculates its outstanding debt. This change is in line with international accounting standards.

“If Panama were able to achieve a rating of investment grade, that would bring many new investors to the country,” said David Saied, former director of public policy with the Ministerio de Economía y Finanzas (MEF).

The firms Indesa and Latin Consulting have said that Panama could see its rating upgraded as soon as 2010, but that would depend on a number of factors, including how the country continues to manage its public debt.