August 3, 2020

Panama pays the debt of more than 944 million dollars with national creditors

The Government of Panama said Tuesday that it approved the disbursement of more than 944 million dollars for the payment of debts that go back even to 2010 with national creditors, with a view to revitalizing an economy that is growing at its slowest pace in a decade.

The Council of Ministers, led by the Panamanian president, Laurentino Cortizo, approved in its ordinary meeting today a decree through which a debt of 422 million dollars is paid with the Social Security Fund (CSS).

The banks were also ordered to pay 438.8 million dollars owed for preferential interest, and 84 million dollars for a debt of the Central Government with the Colon Free Zone (ZLC), the largest in the continent and located in the Caribbean of Panama.

With this, the Panamanian Executive seeks to revitalize the economy, which grew 3.7% in 2018, the lowest rate in a decade, and fulfill its commitment to settle all outstanding debts as of December 31, 2018, said the minister of Economy and Finance, Héctor Alexander.

Cortizo, who assumed the Government on July 1 for the five-year period 2019-2024, has argued that he inherited levels of fiscal deficit above 3.5% and "obligations payable as of December 31, 2018 for about 1,100 million dollars "

In that context, the Government issued only two weeks after assuming power of 2,000 million dollars in debt papers, resources destined to the payment of debts with suppliers and thousands of teachers, medical personnel and other officials.

The minister Alexander explained Tuesday that the payment of the debt of preferential interests with the banks is based on an arrangement with these that consists in canceling 13% of the amount in cash and the remaining 87% through Treasury Notes and Bonds.

He added that as for the ZLC, a debt that the National Bank of Panama had with the commercial emporium is being paid for the construction of a highway that should be an obligation of the Government, an official statement said.

With this action it is intended that ZLC allocate more investments for its recovery after several years of crisis caused by factors such as the collapse of the economy of Venezuela, one of its main buyers, and the rates that Colombia applies to its re-exports.

The Minister of Health, Rosario Turner, said that the payment of the debt with Social Security "will allow this entity to invest in health and professional risk programs for the benefit" of the users.

The persistent economic slowdown, which this year could lead to a GDP growth of around 3%, has already impacted on indicators such as unemployment, which shot up to 7.1% last August from the 6% recorded in the same month of 2018, according to the most recent official figures.

. (tagsToTranslate) Panama (t) millions (t) dollars (t) national creditors (t)

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