Moody’s notes Panama inflexible debt structure

While Panama maintains a favorable debt profile, the deficit could reduce the government's ability to implement counter cyclical policies if the economy slows says ratings agency Moody's.

The agency notes that the credit risk is "relatively inflexible deficit structure characterized by persistent deficits," plus the "repeated exceptions to the limits of public spending" and "inability to react to the economic policy dollarization of the country. "

For this year, the government forecasts a deficit of 2.5 percent, while the legal limit was raised from 2.7 to 2.9 percent.

Source: Newsroom Panama