Panama achieved an unprecedented reduction in the fiscal deficit in 2025, as reported by Minister of Economy and Finance Felipe Chapman during a press conference. The official detailed that the fiscal deficit was reduced by more than $2.069 billion, representing a decrease of nearly 40% compared to the previous year. With this result, the fiscal closure stood at 3.68% of the Gross Domestic Product (GDP), a figure considered historic for the country. Chapman emphasized that the performance not only fell below the target of the General State Budget but also exceeded the requirements of the Fiscal Social Responsibility Law and the forecasts of financial markets and rating agencies. The minister explained that the reduction in Panama's fiscal deficit is already reflected in the decrease in the government's interest rate and the reduction in the country risk premium by more than 54%, even in a global volatile environment with long-term rates on the rise. He also highlighted that the fall in the cost of public debt is generating savings close to 475 million balboas, an amount that covers almost 50% of the subsidy for the pensions of the Social Security Fund (CSS). "We are demonstrating where the resources come from to meet the obligations of Panamanian retirees and to guarantee better future pensions," he emphasized. Chapman also announced a 6% reduction in public spending and a 6.5% increase in revenues, resulting from greater fiscal discipline, digitalization, the use of technology, and the progressive incorporation of artificial intelligence to improve tax collection. Among the implemented initiatives, he mentioned the Fiscal Lottery, which has contributed to the increase in state revenues and the strengthening of Panama's public finances.
