CAF approves Panama with countercyclical support of up to $ 350 million



The Latin American development bank CAF approved to Panama a contingent credit line of up to 350 million dollars to cover the expenses generated by the fiscal measures applied by the Government to mitigate the economic impacts of the COVID-19 crisis.

The regional financial institution said Thursday that this contingent credit line seeks to assist and complement the fiscal measures that the Government is applying to mitigate the economic, financial and social impacts of the pandemic.

Since March 25, an indefinite total quarantine has been in force in Panama that has begun to relax with the revival of internet sales for certain businesses, such as hardware stores and others that have to do with the construction sector, while starting tomorrow Friday the total ban on the sale of alcoholic beverages will be eliminated.

The almost total paralysis of non-essential economic activities has dealt a severe blow to the economy, which is expected to decrease 2% this year according to multilateral organizations, after an expansion of 3% in 2019, the lowest rate in the decade. .

The government of President Laurentino Cortizo invests millions of dollars in social aid, such as the delivery of a monthly bonus of 80 dollars, food bags and electricity subsidies, and has postponed the payment of taxes for several months, in an attempt to alleviate the burden on a population of which almost 50% lived from the informal economy before the pandemic.

"The protection of the social fabric, employment and the reactivation of the economy require a quick and timely response by the authorities," CAF said in informing Thursday of the approval of the long-term loan under the Regional Contingent Credit Line of Anticyclical Support for the Emergency generated by COVID-19 in Panama for up to 350 million dollars.

The multilateral recalled that in the midst of the crisis due to the pandemic, it has already approved non-reimbursable resources of $ 400,000 to Panama for immediate attention to the health system, as well as a contingent credit line of $ 50 million to strengthen the capacity of health response.

CAF also stressed that it has made virtual training mechanisms available to its partners and that it is focused on generating knowledge, as "fundamental elements for countries to design their economic recovery strategies while maintaining the social achievements achieved in recent decades. "

Panama, which registered its first case of COVID-19 on March 9 last, accumulated until Wednesday 7,731 confirmed infections and 218 deaths due to the disease, the largest figures in Central America.

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