Panama's Economy Shows Signs of Recovery After Decline

Panama's redemption came only a year later, in October 2025, when it moved up two positions to rank seventh. This evolution, according to the economist, reflects the confidence of foreign investors and sends a message to global markets that the outlook 'begins to improve'.An agreement that would likely have the support of business because it would mean the reactivation of more than 40,000 direct and indirect jobs in less than 13 months, contributing to the economic dynamism the country needs.He mentioned that these actions include an increase in revenues and, of course, a reduction in public spending, taking into account the improvement in the country's sovereign debt position in international markets. Just three years ago, Panama's bonds were ranked as the third safest in Latin America, but in October 2024, they fell to ninth place, below countries that did not even have an investment grade, such as Brazil, Paraguay, and the Dominican Republic.The president of the Chamber of Commerce, Industries, and Agriculture of Panama (Cciap), Juan Arias Strunz, even announced that he has requested the authorities to disclose the preliminary results of the comprehensive audit of the mine to make a provisional decision on the semi-processed materials still in the area in order to make the most of them.Economist René Quevedo maintains that although the fiscal deficit decreased in 2025, there are important challenges to face due to the rigidity of public spending and the decline in revenues, making it necessary to implement additional measures to accelerate the adjustment and contain the increase in debt that is projected to continue growing until 2027.Nevertheless, Arias Strunz recognizes that it is an exclusive decision of the Executive; therefore, he can only wait for the result of what the new relationship with the company will be, as he believes the discussion should not focus on whether mining should be done or not, but on how the country and its inhabitants can develop this industry sustainably.Moody's Ratings decision to maintain Panama's risk rating at Baa3 is favorable news for the economy and the investment plans contemplated by the Executive; however, there are still pending issues to address to ensure the consolidation of the country as a safe business center.He explained that Moody's decision demonstrates that the actions taken by the Government to mitigate contingent liabilities related to social security through the approval of Law No. 462, which reorganizes the Social Security Fund (CSS) and the Invalidity, Old Age and Death (IVM) program, are well-received internationally.'Mining can be done correctly; we could generate around 40,000 much-needed jobs at this moment,' he stated.'These preliminary results would allow certain operations to be reactivated to make the most of this material; of course, we understand that the mine is not going to be activated overnight,' he said.Another aspect that the agency has seen as 'positive' are the lawsuits derived from the closure of the copper mine, specifically, the possible direct negotiation process with the company First Quantum Minerals.