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Latin America Investment News on Viva Tropical

Panama President Martinelli Keeps Spending, Spending and Spending

Article Summary:

In his two and a half years in office, President Martinelli has increased public debt by over U.S. $ 2 billion. His administration is so good at raising the country’s debt, that it has the honor of creating more debt than all of the combined prior elected presidential administrations.

Photo Credit: Revista Summa

Original Article Text From Revista Summa via Google Translate :

Coming to a close in 2011 and a few days at 2 years with six months of the administration Martinelli, Panama’s public debt increased by U.S. $ 2,158 million in this period, totaling U.S. $ 12,988 million, excluding December.

In June 2009, when President Ricardo Martinelli took office the stock of public debt was U.S. $ 10,830 million, but to date, an increase of $ 2.158 million overcame the cumulative noted previous administrations, of democratic governments.

Thus, the economist Adolfo Quintero analysis indicate that former President Martin Torrijos would have increased the debt by U.S. $ 1,618 million, U.S. $ 1,489 Mireya Moscoso million, Ernesto Perez Balladares $ 368 million and Guillermo Endara about $ 984 million, respectively.

However, to date, Quintero believes that increasing debt will reach Panama Martinelli during the administration of U.S. $ 3,000 million. For the professor also, the money obtained through the State assumes the credit must be allocated to investments that generate wealth to the country and not to pay current expenses.

On the evolution of the debt, the Ministry of Economy and Finance (MEF), expected to be equal to 43% of the GDP of the country (GDP)-that by the end of 2011 in name would be U.S. $ 30,500 million. Even in 2012 aiming to drop below 40%.

For the owner of the MEF, Frank De Lima, the increase in debt stock is contrasted by the evolution of the economy and the consequent generation of resources. Meanwhile, the issue of evolution of the commitment of Panama is also followed by rating agencies like Moody’s, which is announced review of the numbers of the country.

About the same, Raul Castellon, CEO of Equilibrium, partner firm Moody’s Investors Service, noted that “there is concern about the rise in the debt balance in an environment of economic growth.”

He explained that “the economy must be considered, the very long term, could have a typical economic cycle adjustment that would limit or reduce the level of tax collection, and there are pressures stemming payment commitments acquired in the past very long term. ”

Still, said Panama manager Equilibrium: ‘No one expects that scenario, but it is probable, so the savings should be encouraged and embraced today harder fiscal commitments of law.’

The prospects of the Government suggest that the deficit of nonfinancial public sector (NFPS) would be 2% this year, 2% in 2012, 1.5% in 2013 and 1% in 2014, all limits would meet law.

Quintero said that the end will depend on income level that captures the government, and if they satisfy the proposed projects do.

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From Revista Summa

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