Moody's has affirmed Panama's sovereign credit rating at Baa3 for both long-term bonds and the debt program, issued on November 12. Although the fiscal deficit decreased in 2025, Moody's warned that additional measures are needed to accelerate fiscal adjustment and contain the rise in debt, which is projected to continue growing until 2027. The affirmation is based on the government's actions to address contingent liabilities related to the pension system and the litigation over the closure of the Cobre Panama mine. Moody's noted that these steps have reduced the risk of a greater fiscal deterioration. The rating is also supported by the country's economic performance and the dollarization, which limits external imbalances. The outlook remains negative due to the rigidity of public spending and low revenue collection.
