Historic Reduction in Panama's Fiscal Deficit

The Minister of Economy and Finance, Felipe Chapman, announced that in 2025, a historic reduction in the fiscal deficit of 40% was achieved, equivalent to more than $2,069 million, closing at 3.68% of the Gross Domestic Product (GDP). Chapman indicated that this figure is lower than what the markets and rating agencies had expected, which had projected a deficit of at least 4.4%. According to the minister, this reduction is already reflected in the decrease in the government's interest rate and a drop of more than 54% in the country's risk premium. Chapman attributed these results to a 6% reduction in Central Government spending and a 6.5% increase in revenues, driven mainly by the success of the Fiscal Lottery. He detailed that the reduction in the cost of debt is already generating savings of nearly $475 million. The Minister of Economy and Finance, Felipe Chapman, announced that during the year 2025, a historic 40% reduction in the fiscal deficit was achieved, equivalent to more than $2,069 million, closing at 3.68% of the Gross Domestic Product (GDP). Additionally, the official stated that in over a year, accounts payable were reduced by more than $900 million, representing a decrease of almost 46%. He explained that these figures translate into a reduction in the State's financing cost, which accelerates economic growth and subsequently leads to a reduction in the interest rate for citizens. This covers almost 50% of the subsidy for the Social Security Fund (CSS) pensions. 'This is not only below the target set in the General State Budget, but it exceeds it and surpasses the Fiscal Social Responsibility Act,' the minister stated. He highlighted that over 80% of public spending has been allocated to priority areas such as health, education, and social protection for the lowest-income and most vulnerable groups.