Another group of experts is endorsing the strength of Panama’s economy: bond investors. They rank Panama as the “best credit” in Latin America, surpassing Chile, Mexico, and other larger countries, Bloomberg reports.
Panama is seen as the most secure bet for bond investors in the region, with the lowest borrowing costs, according to the article headlined, “A New Contender Has Emerged for the Best Credit in Latin America.”
The confidence of bond investors is a direct reflection of the stability of the government and the strength of the country’s balance.d
Panama offers “a booming economy that’s being propelled by the expansion of its namesake canal, the construction of a rapid-transit system in the capital and the opening of its first natural-gas plant,” Bloomberg concludes. The economy is expected to grow by 5.6 percent this year, which is fueling revenues and leaves “a budget deficit equal to less than 2 percent of the gross domestic product,” according to the article.
“The country’s strong and stable fundamentals make it a positive story in the region,” Emilia Matei, a London-based analyst for Standard Life Aberdeen, told the news service. “The expanded canal benefited from acceleration in global growth and trade, and the fiscal and external accounts keep improving. As such, investors find it an attractive market to get involved in.”
International investors are taking note of the growth pace, including the recent moves to increase trade with China.
“This, coupled with less political risk, an improving deficit, and lower dollar funding needs, has compressed spreads of Panama relative to peers,” Sean Newman, a senior money manager at Invesco Ltd. in Atlanta, told Bloomberg. “I wouldn’t be surprised to see the sovereign upgraded to A in 2018.”
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Eddie Montes is the head of Property Management for Punta Pacifica Realty, a Panama real estate agency focused on Punta Pacifica, the exclusive neighborhood of 18 towers perched on the edge of the Pacific Ocean.