Fitch Ratings has affirmed Panama’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB+’ with a Stable Outlook, as reported on December 10, 2025.
The rating is supported by high per-capita GDP, low inflation, and macro-financial stability anchored by dollarization. Robust growth prospects are centered around logistics activities and the strategic asset of the Panama Canal. The economy is expected to grow by 3.8% in 2025, rebounding from 2.7% in 2024, which was negatively impacted by a historic drought affecting the canal and the closure of the Cobre Panamá copper mine.
However, Fitch warns that public finances remain a challenge. The Non-Financial Public Sector (NFPS) deficit is projected to improve to 4% of GDP in 2025 from 7.4% in 2024, but gross government debt is expected to rise to 67.2% of GDP by the end of 2025, up from 62.5% in 2024.
The agency notes that maintaining the stable outlook will depend on how Panama manages its debt, improves governance, and enhances fiscal information. Weak fiscal transparency, including optimistic budget estimates and a lack of updated data on key projects, is cited as a persistent issue.
Factors that could lead to a negative rating action include a failure to reduce the budget deficit, reduced confidence in Panama's growth prospects, or further social instability.
Conversely, factors that could lead to a positive rating action include structural fiscal consolidation and evidence of improving governance.
