Information about Western Hemisphere Hemisferio Occidental
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Panama

Author(s):
International Monetary Fund
Published Date:
March 1999
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Panama: Basic Data
I. Social and Demographic Indicators
Area (thousand sq. km)77,082Nutrition (1994)
Calorie intake
Population (1996)(per capita a day)2,534
Total (million)2.7
Rate of increase (percent a year)1.6Health (1994)
Density (per sq. km.)35.9Population per physician808
GDP per capita (US$) (1997)3,229Population per hospital bed (1992)335
Unemployment (August 1998)13.4
Population characteristics (1995)Access to safe water (percent
Life expectancy at birth (years)73of population, 1995)
Crude birth rate (per thousand)22.8Total82
Crude death rate (per thousand)4.9Urban84
Infant mortality (per thousand live births)22.6Rural68
Income distribution (1995)Education (in percent, 1995)
By highest 20 percent of households60Secondary education
By lowest 20 percent of households2enrollment rate68
Sources: Panamanian authorities; and Fund staff estimates.

Excluding grants.

External debt service as percent of exports of goods and nonfactor services. The 1997 figure reflects debt restructuring involving the retirement of Brady bonds.

II Economic Indicators, 1993-97
19931994199519961997
(In annual percent changes)
National accounts and prices
GDP at constant 1982 market prices5.52.91.82.44.4
Agriculture and mining0.32.83.10.6-0.9
Manufacturing and construction14.53.71.3-0.74.0
Services3.74.51.63.64.8
Consumer price index (end of period)1.01.30.82.3-0.5
(In percent of GDP)
Gross investment24.124.526.223.625.4
Private consumption53.953.754.656.255.3
Public consumption21.319.720.220.020.4
Gross national saving22.024.122.822.022.4
(In millions of balboas)
Public sector finances
Revenue 1/2,0562,2022,3012,2712,414
Noninterest expenditure1,8331,7921,8681,9642,178
Primary balance (deficit -)223411441312308
Overall balance (deficit -)-101251434-28
Memorandum items:
Primary balance (percent of GDP)3.15.35.63.83.5
Overall balance (percent of GDP)-1.40.30.20.4-0.3
Money704800816833992
Quasi-money3,7324,2984,7005,0165,725
Net domestic assets3,8024,2594,7975,1425,913
Credit to the public sector-523-801-1,031-851-1,011
Credit to the private sector4,9815,7566,5217,0027,948
(In millions of U.S. dollars)
Balance of payments
Trade balance-377.9-248.6-569.2-510.6-593.4
Exports, f.o.b.614.7672.4742.9761.4804.5
Imports, f.o.b.-1,552.10-1,852.7-1,979.9-2,076.2-2,349.3
Colon Free zone559.5931.7667.7804.2951.4
Services and transfers (net)94.9218.3299.9378.3329.2
Of which: Interest on public debt-338.6-354.0-393.2-243.3-286.2
Current account-282.9-30.3-269.3-132.3-264.3
Capital account458.5-67.916.1532.1406.9
Public196.1-230.8-68.7-168.4-336.2
Private262.4162.984.7700.5743.1
Overall balance175.6-98.2-253.2399.8142.6
Net foreign assets of BNP377.6631.6708.7952.11,082.3
External payments arrears3,236.03,526.23,938.197.343.5
Memorandum items:
Debt-service ratio 2/26.320.321.915.444.4
Current account (as percent of GDP)-4.3-0.4-3.4-1.6-3.0
External debt outstanding (as percent of GDP)78.071.275.261.857.9
IMF data (as of October 31,1998)
Article VIII statusAs of 11/26/46
Intervention currency and rateB 1.00 per U.S. dollar
QuotaSDR 149.6 million
Fund holdings of local currencySDR265.75 million
From Fund resources (including SBA and EFF)128.0
Fund holdings as percent of quota177.6
Arrears with the FundNone
Special Drawing Rights Department
Cumulative SDR allocationSDR 26.32 million
Net acquisition or utilization (-) of SDRs24.55 million
Holdings of SDRs1.77 million
Share of profits from gold salesUS$5.7 million
Sources: Panamanian authorities; and Fund staff estimates.

Excluding grants.

External debt service as percent of exports of goods and nonfactor services. The 1997 figure reflects debt restructuring involving the retirement of Brady bonds.

Sources: Panamanian authorities; and Fund staff estimates.

Excluding grants.

External debt service as percent of exports of goods and nonfactor services. The 1997 figure reflects debt restructuring involving the retirement of Brady bonds.

Introduction

This report provides background information to the staff report for the 1998 Article IV consultation discussions with Panama. It presents an overview of recent developments and chapters focusing on areas of interest in Panama’s medium-term economic strategy. The first chapter gives a broad overview of economic developments with emphasis on 1997. Subsequent chapters update information on important areas of economic activity: the structure and reform of the financial sector (Chapter II); reversion of the Canal Zone areas to Panama (Chapter III); and analysis of key elements of the economic reform program since 1994, including trade reform and other measures to foster competitiveness and competition (Chapter IV).

I. Macroeconomic Trends

1. Following the political and economic crisis of 1988-89, when real GDP fell by a cumulative 18 percent, the economy experienced a broad-based recovery with high rates of real GDP growth. The recovery was facilitated by the lifting of economic sanctions and large aid flows by the United States, and was supported by an economic program that succeeded in restoring financial stability and began to address structural distortions. However, progress with respect to deregulation, privatization, and public sector reform was limited.

A. Developments During 1990-92

2. Reform policies initiated during 1990-92 were supported by loans from the IBRD and IDB, grants from U.S. AID, and by a 1992 Stand-by Arrangement with the Fund. Economic growth rebounded, inflation remained low and unemployment, which was almost 19 percent in 1989, fell to 14.7 percent in 1992. While the condition of the public finances improved, at least one structural reform was reversed and progress in other structural areas was slow. The overall public sector deficit was reduced from an annual average of 10 percent of GDP during 1988-89 to 1.3 percent of GDP in 1991 and turned into a small surplus in 1992. The strengthening of the fiscal position resulted particularly from enhanced tax administration and an improvement in the finances of the Social Security Agency (CSS). However, a structural rigidity was reinstated in 1991 when the Supreme Court reactivated special labor laws that had been suspended since 1988, granting again automatic wage increases to more than 50 percent of civil servants. The public sector accumulated sizable external arrears during 1988-91, but in 1992 arrears with multilateral institutions were settled and agreement was reached to reschedule a substantial part of the debt owed to Paris Club creditors. During 1990-92 some liberalization of the trade regime was achieved through the conversion of quantitative trade barriers to ad valorem tariffs.

B. Developments During 1993-96

3. In the period preceding the 1994 elections, the economy slowed as economic reforms lost momentum, and the overall public sector balance returned to a small deficit. The government that assumed office in 1994 began to implement a medium-term program of economic reforms to promote economic growth and to reduce unemployment while maintaining low inflation in the context of a reasonable fiscal balance. The reform agenda included public debt restructuring, trade liberalization, privatization, and other measures to foster private sector participation and competition. The program was supported by a Stand-by Arrangement with the Fund beginning in November 1995.

4. Real GDP weakened substantially to an annual average of about 2½ percent during 1994-96 with negative growth in mining, construction and Colon Free Zone (ZLC) activities (Table 1). Dampened conditions were due in part to the crisis in Mexico, virtually halting major residential construction in Panama City and reducing trading activity through the ZLC. During this period unemployment remained near 14 percent (Table 9). The persistence of high unemployment was associated with rigidities in the labor market and the low labor absorption of some of the more dynamic sectors in the economy (SM/96/164, Rev. 1). Inflation remained low, averaging around 1½ percent a year during 1994-96 (Table 11). Panama does not have an exchange rate policy since the U.S. dollar serves as legal tender and the balboa is used as a unit of account and to issue coins. The absence of domestic currency issue has contributed to the maintenance of price stability.

Table 1.Panama: National Accounts by Productive Activity 1/
19931994199519961997
(In millions of balboas at 1982 prices)
Gross domestic product at market prices5,922.56,091.36,198.06,348.26,628.7
Primary activity488.7502.4517.8521.0516.3
Agriculture480.4493.3509.2512.9506.8
Mining8.39.18.68.19.5
Secondary activity832.7863.2874.6868.4903.1
Manufacturing589.5614.6615.8620.3642.6
Construction243.2248.6258.8248.1260.5
Services4,506.74,710.14,784.24,954.15,190.5
Public utilities240.0255.0259.9311.0321.7
Commerce, restaurants,

and hotels
1,229.51,289.81,280.41,271.71,379.9
Colon Free Zone, wholesale488.2533.6516.6494.3570.4
Restaurants and hotels85.490.395.0100.7106.1
Other655.9665.9668.8676.7703.4
Transport and communications666.3695.8761.3781.8817.1
Panama Canal Commission352.0362.4419.4429.9422.2
Other transport and communications314.3333.4341.9351.9394.9
Financial intermediation647.0675.0641.8706.1729.2
Housing786.5821.1841.4867.7889.5
Public administration612.1632.0653.5665.3690.6
Other services325.3341.4345.9350.5362.5
Plus import taxes 2/235.9245.2249.8256.5279.9
Less imputed banking services141.5229.6228.4251.8261.1
(Percent change)
Gross domestic product at market prices5.52.91.82.44.4
Primary activity0.32.83.10.6-0.9
Agriculture0.02.73.20.7-1.2
Mining16.99.6-5.5-5.817.3
Secondary activity14.53.71.3-0.74.0
Manufacturing6.34.30.20.73.6
Construction40.52.24.1-4.15.0
Services3.74.51.63.64.8
Public utilities18.16.31.919.73.4
Commerce, restaurants, and hoteles5.14.9-0.7-0.78.5
Colon Free Zone, wholesale4.59.3-3.2-4.315.4
Restaurants and hotels2.35.75.26.05.4
Other5.81.50.41.23.9
Transport and communications-3.24.49.42.74.5
Panama Canal Commission-5.23.015.72.5-1.8
Other transport and communications-0.96.12.52.912.2
Financial intermediation10.84.3-4.910.03.3
Housing2.34.42.53.12.5
Public administration0.73.33.41.83.8
Other services0.94.91.31.33.4
Plus import taxes 2/40.43.91.92.79.1
Less imputed banking services26.362.3-0.510.23.7
(Percent distribution)
Gross domestic product at market prices100.0100.0100.0100.0100.0
Primary activity8.38.28.48.27.8
Agriculture8.18.18.28.17.6
Mining0.10.10.10.10.1
Secondary activity14.114.214.113.713.6
Manufacturing10.010.19.99.89.7
Construction4.14.14.23.93.9
Services76.177.377.278.078.3
Public utilities4.14.24.24.94.9
Commerce, restaurants, and hotels20.821.220.720.020.8
Colon Free Zone, wholesale8.28.88.37.88.6
Restaurants and hotels1.41.51.51.61.6
Other11.110.910.810.710.6
Transport and communications11.311.412.312.312.3
Panama Canal Commission5.95.96.86.86.4
Other transport and communications5.35.55.55.56.0
Financial intermediation10.911.110.411.111.0
Housing13.313.513.613.713.4
Public administration10.310.410.510.510.4
Other services5.55.65.65.55.5
Plus import taxes 2/4.04.04.04.04.2
Less imputed banking services2.43.83.74.03.9
Sources: Office of the Comptroller General; and Fund staff estimates.

The national accounts for 1980-94 were revised and published in December 1995. The base year for the constant price data was updated to 1982 from 1970 and methodological improvements were implemented.

Includes the sales tax; “impuesto a la transferencia de bienes muebles.”

Sources: Office of the Comptroller General; and Fund staff estimates.

The national accounts for 1980-94 were revised and published in December 1995. The base year for the constant price data was updated to 1982 from 1970 and methodological improvements were implemented.

Includes the sales tax; “impuesto a la transferencia de bienes muebles.”

Table 2.Panama: National Accounts by Use
19931994199519961997
(In millions of balboas at current prices)
Total domestic demand7,198.97,577.87,986.88,229.88,876.4
Consumption5,449.95,681.15,913.06,284.26,644.3
Public1,543.21,525.61,595.11,650.51,788.2
Private3,906.74,155.54,317.94,633.74,856.1
Gross domestic investment1,749.01,896.72,073.81,945.62,232.1
Public288.8266.7272.0313.4388.4
Private 1/1,460.21,630.01,801.81,632.21,843.7
Balance of trade (goods and nonfactor services)53.8156.2-80.713.8-96.7
Excluding the Colon Free Zone-212.7-255.3-231.3-344.4-463.8
Exports of goods and nonfactor services2,715.23,074.72,990.33,117.03,397.3
Excluding the Colon Free Zone1,999.02,143.02,322.52,312.82,396.5
Imports of goods and nonfactor services2,661.42,918.53,071.03,103.23,494.0
Excluding the Colon Free Zone2,211.62,398.32,553.82,657.22,860.2
Gross domestic product at current market prices7,252.77,733.97,906.18,243.68,779.7
(In percent of GDP)
Total domestic demand99.398.0101.099.8101.1
Consumption75.173.574.876.275.7
Public21.319.720.220.020.4
Private53.953.754.656.255.3
Gross domestic investment24.124.526.223.625.4
Public4.03.43.43.84.4
Private 1/20.122.822.819.821.0
Balance of trade (goods and nonfactor services)0.72.0-1.00.2-1.1
Excluding the Colon Free Zone-2.9-3.3-2.9-4.2-5.3
Exports of goods and nonfactor services37.439.837.837.838.7
Excluding the Colon Free Zone27.627.729.428.127.3
Imports of goods and nonfactor services36.737.738.837.639.8
Excluding the Colon Free Zone30.531.032.332.232.6
Gross domestic product at current market prices100.0100.0100.0100.0100.0
(Annual percent change)
Total domestic demand8.65.35.43.07.9
Consumption2.44.24.16.35.7
Public16.5-1.14.63.58.3
Private 1/-2.36.43.97.34.8
Gross domestic investment33.88.49.3-6.214.7
Public38.4-7.72.015.223.9
Private 1/32.911.610.5-9.413.0
Balance of trade (goods and nonfactor services)450.9190.2-151.7-117.1-801.4
Excluding the Colon Free Zone68.320.0-9.448.956.7
Exports of goods and nonfactor services9.513.2-2.74.29.0
Excluding the Colon Free Zone5.77.28.4-0.45.7
Imports of goods and nonfactor services7.79.75.21.012.6
Excluding the Colon Free Zone9.68.46.54.011.6
Gross domestic product at current market prices9.26.62.24.36.5
Sources: Office of the Comptroller General; and Fund staff estimates.

Includes changes in inventories

Sources: Office of the Comptroller General; and Fund staff estimates.

Includes changes in inventories

Table 3.Panama: Saving and Investment
19931994199519961997
(In millions of balboas)
Gross domestic investment1,749.01,896.72,073.81,945.62,232.1
Fixed capital formation1,723.81,873.21,972.72,069.32,276.0
Public sector288.8266.7272.0313.4388.4
Private sector1,435.01,606.51,700.71,755.91,887.6
Changes in inventories25.223.5101.1-123.7-43.9
Gross national saving1,592.61,866.41,804.51,813.31,967.9
Public sector saving187.8290.2278.6342.5290.1
Private sector saving1,404.81,576.21,525.91,470.81,677.8
Foreign saving156.430.3269.3132.3264.3
(In percent of GDP)
Gross domestic investment24.124.526.223.625.4
Fixed capital formation23.824.225.025.125.9
Public sector4.03.43.43.84.4
Private sector19.820.821.521.321.5
Changes in inventories0.30.31.3-1.5-0.5
Gross national saving22.024.122.822.022.4
Public sector saving2.63.83.54.23.3
Private sector saving19.420.419.317.819.1
Foreign saving2.20.43.41.63.0
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.
Table 4.Panama: Agricultural Production
19931994199519961997
(In millions of balboas at 1982 prices)
Total480.4493.3509.2512.9506.8
Crops259.4269.0262.9259.0239.3
Rice31.832.333.235.124.5
Corn17.117.317.618.210.9
Bananas130.5136.1126.6115.7109.2
Sugarcane19.019.318.219.622.3
Coffee11.813.215.015.014.1
Other49.250.852.355.458.3
Livestock155.0157.3159.3168.0170.6
Forestry14.714.612.812.012.7
Fish51.352.474.273.984.2
(Annual percent change)
Total0.02.73.20.7-1.2
Crops-3.03.7-2.3-1.5-7.6
Livestock-0.21.51.35.51.5
Forestry0.7-0.7-12.3-6.35.8
Fish19.02.141.6-0.413.9
Source: Office of the Comptroller General.
Source: Office of the Comptroller General.
Table 5.Panama: Value Added in Manufacturing
19931994199519961997
(In millions of balboas at 1982 prices)
Total589.5614.6615.8620.3642.6
Food227.2237.1245.5249.1263.0
Beverages53.153.752.755.659.2
Tobacco21.127.827.228.727.6
Petroleum products21.115.110.519.017.4
Textiles and garments42.838.134.432.030.0
Leather products and footwear10.911.613.011.410.4
Wood and furniture25.331.427.628.431.1
Paper products26.129.930.628.827.2
Printing and publishing14.215.216.213.512.9
Chemicals, rubber, and plastic products58.157.659.356.857.2
Glass and other mineral products45.549.945.241.144.2
Basic metal industries10.89.810.913.717.6
Metal products, machinery, and equipment19.321.522.721.224.5
Other14.015.920.021.020.3
(Annual percent change)
Total6.34.30.20.73.6
Petroleum products-19.8-28.4-30.581.0-8.4
Total (excluding petroleum products)7.65.51.0-0.74.0
Food, beverages, and tobacco3.85.72.12.54.9
Other products12.35.2-0.4-4.32.8
Source: Office of the Comptroller General.
Source: Office of the Comptroller General.
Table 6.Panama: Electricity Generation and Consumption

(In thousands of gigawatt hours) 1/

19931994199519961997
Net generation3.153.363.523.824.05
Hydro2.302.392.423.002.90
Thermal0.850.971.100.821.15
Total consumption2.492.672.872.983.30
Residential0.750.790.850.860.94
Commercial0.840.911.001.041.18
Industrial0.410.430.460.470.47
Government0.450.470.530.550.57
Petroterminal0.010.010.010.000.00
Other0.030.060.020.060.14
Source: Hydraulic Resources and Electricity Institute (IRHE).

A gigawatt hour is equal to one billion watts generated or consumed during one hour.

Source: Hydraulic Resources and Electricity Institute (IRHE).

A gigawatt hour is equal to one billion watts generated or consumed during one hour.

Table 7.Panama: Private Sector Construction Permits, District of Panama(In thousands of square meters)
19931994199519961997
Total968.9912.4827.9925.3702.4
Residential706.7550.4505.8430.0354.9
Commercial228.9299.7277.0438.9319.9
Industrial29.014.814.426.83.9
Other4.347.630.729.623.7
Source: Office of the Comptroller General.
Source: Office of the Comptroller General.
Table 8.Panama: Domestic Sales of Petroleum
19931994199519961997
(In millions of U.S. dollars)
Domestic sales190.6200.0222.5255.8309.1
Gasoline58.659.969.080.587.7
Diesel79.988.593.7103.8126.9
Fuel oil22.827.334.339.835.6
Kerosene2.32.22.12.03.1
LP gas16.317.319.422.133.1
Other products 1/10.74.84.07.622.7
(In millions of barrels)
Domestic sales8.39.09.79.810.8
Gasoline2.32.42.62.72.9
Diesel3.13.74.13.64.3
Fuel oil1.51.71.81.91.7
Kerosene0:10.10.10.10.1
LP gas0.80.90.91.01.0
Other products 1/0.50.20.20.50.8
Source: Ministry of Commerce and Industry.

Includes marine diesel.

Source: Ministry of Commerce and Industry.

Includes marine diesel.

Table 9.Panama: Labor Force Statistics 1/
19931994199519961997
(Thousands of persons)
Total population2,535.02,582.62,631.02,674.52,718.7
Working-age population1,557.91,594.71,632.41,670.21,706.8
Total labor force 2/940.3967.31,007.91,012.11,049.4
Employment by activity815.6831.8866.7867.2909.1
Agriculture and mining189.3167.9181.9176.0171.6
Manufacturing84.489.592.694.096.2
Public utilities8.69.38.89.19.1
Construction49.552.553.654.959.6
Commerce135.0146.1152.1153.0168.1
Banking17.919.419.722.122.8
Transport and communication59.360.763.459.062.1
Other services271.5286.4294.6299.1319.6
Unemployment124.7135.5141.3144.9140.3
Memorandum items:
Number of employed by:
Public sector156.6163.3161.4160.2161.8
Private business323.4340.4354.3359.4372.7
Self-employed236.1232.8247.0250.3275.9
Other99.495.4103.997.398.7
(Annual percent change)
Total population1.91.91.91.71.7
Working age population2.42.42.42.32.2
Total labor force2.72.94.20.43.7
Employed4.32.04.20.14.8
Unemployed-7.28.74.32.5-3.2
(In percent)
Labor force participation rate 3/60.460.761.760.661.5
Employment ratio 4/52.452.253.151.953.3
Unemployment rate13.314.014.014.313.4
Of which:
Metropolitan areas 5/15.616.016.616.915.4
Sources: Ministry of Labor; and Office of the Comptroller General.

Data are based on August surveys, except for total population which is a mid-year estimate.

Excludes indigenous population, canal area and collective housing, but includes employees in the formal and informal sectors, employers, and the self-employed.

Total labor force as percent of the working-age population.

Employed labor force as a percent of the working-age population.

Includes the cities of Panama and Colon.

Sources: Ministry of Labor; and Office of the Comptroller General.

Data are based on August surveys, except for total population which is a mid-year estimate.

Excludes indigenous population, canal area and collective housing, but includes employees in the formal and informal sectors, employers, and the self-employed.

Total labor force as percent of the working-age population.

Employed labor force as a percent of the working-age population.

Includes the cities of Panama and Colon.

Table 10.Panama: Average Prices Received by Farmers
19931994199519961997
(In balboas per unit)
Rice (100 lb.) 1/12.1212.5612.8711.9112.32
Corn (100 lb.)11.7111.6711.8612.3412.26
Beans (100 lb.) 2/33.5033.1235.1332.7738.53
Potatoes (100 lb.)18.8826.2923.4024.7219.30
Bananas (stalk)2.462.682.172.612.76
Chicken (live, lb.)1.201.231.241.211.23
Milk, fresh (bottle)0.300.300.290.270.28
(In 1987 prices) 3/
Rice (100 lb.) 1/10.9511.0711.3710.7311.03
Corn (100 lb.)10.5810.2910.4811.1110.97
Beans (100 lb.) 2/30.2729.1931.0429.5234.49
Potatoes (100 lb.)17.0623.1720.6822.2717.27
Bananas stalk2.222.361.922.352.47
Chicken (live, lb.)1.081.081.101.091.10
Milk, fresh (bottle)0.270.260.260.240.25
Source: Office of the Comptroller General.

First grade.

Colorado or Chiricano.

Deflated by the agricultural wholesale price index.

Source: Office of the Comptroller General.

First grade.

Colorado or Chiricano.

Deflated by the agricultural wholesale price index.

Table 11.Panama: Selected Price Indices 1/(Annual percent change)
19931994199519961997
(Period average)
Consumer price index0.51.30.91.31.3
Wholesale price index-0.32.03.02.1-2.2
Imports1.81.93.93.8-4.1
Industrial products-2.52.22.71.3-0.9
Agricultural products0.62.5-0.2-1.90.6
GDP deflator3.63.70.51.72.0
(End of period)
Consumer price index1.01.30.82.3-0.5
Wholesale price index0.24.41.83.5-3.9
Imports1.05.12.86.0-6.3
Industrial products-1.44.41.52.2-2.5
Agricultural products3.42.1-1.0-0.90.8
Sources: Office of the Comptroller General; and Fund staff estimates.

The consumer and wholesale price indices use 1987 as the reference period.

Sources: Office of the Comptroller General; and Fund staff estimates.

The consumer and wholesale price indices use 1987 as the reference period.

Table 12.Panama. Consumer Price Index(1987=100)
TotalFoodClothingHousingMiscellaneous
(In percent)
Weights:100.034.95.121.039.0
(Period average)
1993105.1108.4110.8103.7102.2
1994106.5110.0111.5103.6104.1
1995107.5110.6110.0105.4105.5
1996108.9111.4109.0108.2106.9
1997110.2112.2106.8110.5108.7
(End of period)
1993105.8109.0111.4103.4103.3
1994107.2111.7108.9104.2104.5
1995108.1111.7109.4106.5105.6
1996110.6113.6108.8110.2108.4
1997110.1112.6106.4110.6108.1
1993
March104.8107.7109.9104.0101.9
June105.1108.4111.2103.9101.9
September104.8108.1111.5103.8101.6
December105.8109.0111.4103.4103.3
1994
March105.8108.3112.8103.5103.9
June106.4110.1112.5103.3104.0
September106.7110.7110.4103.7104.3
December107.2111.7108.9104.2104.5
1995
March107.0109.5110.5104.9105.4
June107.7110.3110.6105.5106.2
September108.0111.3109.1105.4106.2
December108.1111.7109.4106.5105.6
1996
March108.4111.3110.2107.0106.4
June108.3110.2107.6107.9106.9
September109.1111.9109.3108.7106.9
December110.6113.6108.8110.2108.4
1997
March109.9111.9108.2109.7108.7
June110.3112.0106.5110.5109.1
September110.6112.7104.4110.8109.4
December110.1112.6106.4110.6108.1
1998
March110.4112.2108.3110.5108.9
June110.8112.7108.2110.5109.7
September111.5112.7108.1113.2110.0
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.
Table 13.Panama: Wholesale Price Index(1987 = 100)
TotalImportsIndustrialAgricultural
(In percent)
Weights100.043.745.111.2
(Period average)
1993110.1114.8105.6110.7
1994112.4116.9107.9113.5
1995115.7121.5110.8113.2
1996118.2126.2112.3111.0
1997115.5121.0111.2111.7
(End of period)
1993109.3112.8105.2112.0
1994114.1118.6109.8114.4
1995116.2121.9111.4113.2
1996120.3129.2113.8112.2
1997115.6121.1111.0113.1
1993
March110.0114.3106.2109.1
June110.9116.4105.8110.0
September110.3115.6105.0111.6
December109.3112.8105.2112.0
1994
March110.1114.2105.9111.7
June112.1117.1106.9114.7
September113.2117.8108.9113.0
December114.1118.6109.8114.4
1995
March114.7120.0110.2112.2
June116.0121.8111.1113.7
September116.0122.4110.6113.6
December116.2121.9111.4113.2
1996
March117.8126.3111.6109.9
June117.0124.3111.4111.0
September117.6125.0112.2111.0
December120.3129.2113.8112.2
1997
March115.8121.3111.7111.0
June115.4120.8111.2111.1
September115.3120.7111.0111.7
December115.6121.1111.0113.1
1998
March111.6115.1108.1112.8
June111.1113.9108.0113.2
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.
Table 14.Panama: Selected Energy Prices
Detail199219931994199519961997
(Balboas per megawatt hour)
Electricity rates
Weighted average116.4115.4115.5115.5112.8111.6
Residential123.3121120.5120.5120.5118.0
Commercial119.6119.4119.2119.2119.5118.1
Industrial102.6100.9100.799.499.499.4
Government113.8113.1103.4112.7111.6111.0
(Balboas per gallon)
Petroleum prices
Gasoline premium1.891.591.621.661.781.76
Gasoline regular1.811.511.521.621.671.67
Diesel1.181.071.131.201.301.26
Kerosene1.101.051.101.181.231.14
Sources: Hydraulic Resources and Electricity Institute (IRHE); and Ministry of Commerce and Industry.
Sources: Hydraulic Resources and Electricity Institute (IRHE); and Ministry of Commerce and Industry.

5. Investor confidence and saving began to recover in 1993, in the period leading to the 1994 elections, and subsequently with the implementation of a program featuring a prudent fiscal policy, structural reforms, and external public debt restructuring. Private investment increased from an annual average of about 13 percent of GDP during 1990-92 to 21 percent of GDP during 1993-96. Private saving rebounded from 12½ percent of GDP to 19 percent of GDP over the same periods (Table 3). Public investment and saving also increased, especially during 1994-96, relative to the years immediately following the crisis. As a result of the recovery in saving, the external current account deficit declined, to 1½ percent of GDP in 1996.

6. After a small deficit of 1.4 percent of GDP in 1993 when tax administration and CSS performance weakened, the public sector finances shifted to small surpluses during 1994-96 as a result of the implementation of the government’s reform policies (Table 15). In 1994 expenditure control improved, and in 1995 strong revenue collection efforts by the central government and the CSS were only partly offset by automatic government wage increases, higher external interest obligations, and increased spending by the CSS on pensions and medical services. A Tax Incentives Harmonization Law was passed in June 1995, and important progress was made in 1996 to prepare for the privatization of ports.

Table 15.Panama: Operations of the Nonfinancial Public Sector
Prel.Preliminary

Jan. - Jun.
1993199419951996199719971998
(In millions of balboas)
Revenue2,055.82,202.02,301.02,271.22,413.71,198.31,254.6
General government revenue1,684.31,782.31,962.71,997.82,118.31,036.31,126.4
Central government1,150.81,204.31,287.21,325.91,447.4680.4775.0
Social security agency474.6522.3586.5613.5613.0324.4319.2
Rest of general government58.955.789.058.457.931.532.3
Public enterprises operating balance (deficit -)335.5369.3341.3293.5240.4143.183.3
Overall balance of nonconsolidated public sector (deficit -)-5.212.2-18.0-16.020.89.348.8
Educational insurance balance (deficit -)22.313.9-0.8-22.74.1-1.7-19.4
Capital revenue18.924.315.818.630.111.315.5
Grants0.11.07.84.670.650.050.0
Expenditure2,156.82,178.52,294.42,242.12,512.01,239.41,375.0
General government current expenditure1,868.01,911.82,022.41,928.72,123.71,024.11,110.0
Central government1,128.71,146.71,185.61,079.61,207.3603.3658.4
Social security agency609.9651.8720.2725.5780.7360.0388.5
Rest of general government129.4113.3116.7123.5135.760.863.1
Capital288.8266.7272.0313.4388.4215.2265.0
Fixed investment282.4237.6243.1279.5341.1188.5230.4
Transfers to private sector6.429.128.934.047.326.834.6
Saving 1/187.8290.2278.6342.5290.1174.1144.6
Overall balance (deficit -)2/-100.924.514.433.6-27.78.9-70.4
Financing100.9-24.5-14.4-33.627.7-8.970.4
External219.0119.0206.4-224.1-481.2-467.3217.7
Disbursements48.752.0112.7262.31,500.2630.7398.3
Repayments279.1271.0262.6328.71,277.7520.6165.1
Debt rescheduling0.0481.077.73,342.835.719.00.0
Arrears449.4-143.0278.6-3,422.5-67.82.60.0
Trust fund for development0.00.00.0-78.0-671.6-599.0-15.5
Domestic (net)-118.1-193.5-220.8117.9-162.7-140.6-159.0
Of which: Banking System-260.4-277.8-229.5179.8-160.0-218.2-175.7
Arrears0.035.00.00.0-35.0-13.00.0
Privatization0.050.00.072.6671.6599.011.7
(Annual percent change)
Revenue2.47.14.5-1.36.35.34.7
Expenditure13.11.05.3-2.312.013.510.9
Current10.02.35.8-4.610.16.08.4
Capital38.4-7.72.015.223.970.723.1
(In percent of GDP 3/)
Revenue28.328.529.127.627.527.327.2
Grants0.00.00.10.10.81.11.1
Expenditure29.728.229.027.228.628.229.8
Current25.824.725.623.424.223.324.1
Capital4.03.43.43.84.44.95.8
Saving 1/2.63.83.54.23.34.03.1
Overall balance (deficit-) 2/-1.40.30.20.4-0.30.2-1.5
Financing (net)1.4-0.3-0.2-0.40.3-0.21.5
External3.01.52.6-2.7-5.5-10.64.7
Domestic (net)-1.6-2.5-2.81.4-1.9-3.2-3.5
Privatization0.00.60.00.97.613.60.3
External interest obligations4.04.65.02.93.23.03.2
(In millions of balboas)
Memorandum items:
External interest obligations291.0354.0393.0241.6281.6132.0146.5
GDP (market prices)7,252.77,733.97,906.18,243.68,779.7
Balance in Trust Fund for Development 4/0.00.00.078.0754.1677.0769.6
Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy: and Fund staff estimates.

Revenue less current expenditure.

Revenue and grants, less expenditure.

Part-year percentages are annualized.

The Trust Fund for Development invests divestment proceeds abroad and transfers its investment income to the central government to finance development projects, including social projects.

Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy: and Fund staff estimates.

Revenue less current expenditure.

Revenue and grants, less expenditure.

Part-year percentages are annualized.

The Trust Fund for Development invests divestment proceeds abroad and transfers its investment income to the central government to finance development projects, including social projects.

Table 16.Panama: Central Government Operations
Prel.Preliminary

Jan.-Jun.
1993199419951996199719971998
(In millions of balboas)
Revenue1,355.91,361.91,473.71,544.61,600.4783.2814.9
Tax revenue862.5916.3990.2984.91,043.5496.0546.5
Income tax336.3352.4405.4392.4416.9195.2193.6
Wealth taxes38.441.443.645.447.125.629.5
Taxes on foreign trade156.6177.7188.3193.6219.097.1115.7
Taxes on domestic transactions331.2344.8352.9353.5360.5178.1207.7
Nontax revenue491.4442.7481.6558.2554.3286.6267.8
Panama Canal78.381.292.094.195.448.548.6
Oil pipeline royalties3.83.03.10.00.00.00.0
Transfers from the rest of public sector261.2220.9264.4345.9257.6149.080.8
Other148.1137.6122.1118.2201.389.1138.4
Capital revenue2.02.91.91.52.50.60.6
Grants0.11.07.84.670.650.050.0
Expenditure1,607.11,599.31,627.41,487.11,733.3877.31,134.8
Current1,401.71,427.71,474.01,327.11,480.5749.3957.6
Wages and salaries567.8533.0542.9568.5592.4287.4314.7
Goods and Services149.3134.1111.8112.5147.565.683.7
Pensions and transfers388.8405.6417.2385.7394.1230.4376.7
Of which:
Social security agency209.0212.2216.7170.7194.0107.1259.6
Decentralized agencies61.168.868.974.576.637.839.1
Public enterprises2.90.02.82.22.61.10.5
Interest290.8350.3394.4251.4299.7142.5156.8
Internal24.824.225.328.632.918.716.3
External266.0326.1369.1222.8266.8123.8140.5
Other current expenditure5.04.87.78.946.923.325.7
Capital205.4171.6153.4160.1252.8128.0177.2
Fixed capital formation162.4115.6113.6117.8197.698.8142.6
Transfers of capital43.056.039.842.355.129.234.5
To decentralized agencies18.37.910.86.42.41.80.0
To public enterprises18.318.80.11.95.50.70.0
Other6.429.328.934.047.226.834.5
On lending0.00.00.048.0-30.0-30.00.0
Saving 1/-45.8-65.7-0.3217.6119.933.8-142.7
Overall balance (deficit-)2/-251.1-236.4-145.914.0-32.3-14.2-269.9
(In millions of balboas)
Financing251.1197.0145.9-14.032.314.2269.9
External266.0147.0269.8-174.9-431.6-441.9226.4
Disbursements110.058.099.5250.61,496.7648.0380.7
Repayments48.0198.0196.0274.61,224.6493.5142.6
Debt rescheduling0.0481.029.93,342.835.70.00.0
Arrears204.0-144.0336.4-3,415.7-67.82.60.0
Trust Fund for Development0.00.00.0-78.0-671.6-599.0-11.7
Domestic (net)-14.90.0-123.988.3-207.7-142.931.8
Of which: Banking system-128.7-12.6-55.9222.0-131.4-164.5-94.0
Arrears0.035.00.00.0-35.0-13.00.0
Privatization0.050.00.072.6671.6599.011.7
(Annual percent change)
Current revenue6.90.48.24.83.63.04.0
Tax revenue4.16.28.1-0.55.91.310.1
Nontax revenue12.7-9.98.815.9-0.76.2-6.6
Total expenditure12.8-0.51.8-8.616.622.029.4
Current expenditure7.21.93.2-10.011.614.527.8
Capital expenditure74.8-16.5-10.64.457.9103.038.4
(In percent of GDP)3/
Current revenue18.717.618.618.718.217.817.7
Tax revenue11.911.812.511.911.911.411.9
Nontax revenue6.85.76.16.86.36.65.8
Total expenditure22.220.720.618.019.720.024.6
Current expenditure19.318.518.616.116.917.120.8
Capital expenditure2.82.21.91.92.92.93.8
Saving 1/-0.6-0.90.02.61.30.8-3.1
Overall balance (deficit -) 2/-3.5-3.1-1.80.2-0.4-0.3-5.9
Financing (net)3.53.11.8-0.20.40.35.9
External3.72.53.4-2.1-4.9-10.14.9
Domestic-0.20.0-1.61.1-2.4-3.30.7
Privatization0.00.60.00.97.613.60.3
(In millions of balboas)
Memorandum items:
GDP (market prices)7,252.77,733.97,906.18,243.68,779.7
Balance in Trust Fund for Development 4/0.00.00.078.0754.1677.0769.6
Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Revenue less current expenditure.

Revenue and grants, less expenditure.

Part-year percentages are annualized.

The Trust Fund for Development invests divestment proceeds abroad and transfers its investment income to the central government to finance development projects, including social projects.

Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Revenue less current expenditure.

Revenue and grants, less expenditure.

Part-year percentages are annualized.

The Trust Fund for Development invests divestment proceeds abroad and transfers its investment income to the central government to finance development projects, including social projects.

Table 17.Panama: Central Government Revenue
Prel.Preliminary

Jan.-Jun.
1993199419951996199719971998
(In millions of balboas)
Total revenue (Including grants)1,356.01,362.91,481.51,549.21,670.9833.2864.9
Tax revenue862.5916.3990.2984.91,043.5496.0546.5
Direct taxes374.7393.8449.0437.8464.0220.8223.1
Income tax336.3352.4405.4392.4416.9195.2193.6
Wealth tax38.441.443.645.447.125.629.5
Taxes on foreign trade156.6177.7188.3193.6219.097.1115.7
Export taxes12.013.610.79.46.23.21.7
Import taxes144.6164.1177.6184.2212.893.9114.0
Taxes on domestic transactions331.2344.8352.9353.5360.5178.1207.7
Tobacco and beverages40.140.841.437.140.220.721.4
Value added tax134.7143.2147.3154.6163.578.789.6
Petroleum products92.793.995.397.693.943.457.1
Stamp taxes33.336.337.633.637.315.621.9
Other30.430.631.230.725.619.717.4
Grants0.11.07.84.670.650.050.0
Nontax revenue491.4442.7481.6558.2554.3286.6267.8
Panama Canal78.381.292.094.195.448.548.6
Oil pipeline royalties3.83.03.10.00.00.00.0
Other Services148.1137.6122.1118.2181.084.894.9
Transfers from rest of public sector261.2220.9264.4345.9257.6149.080.8
Of which:
Consolidated public sector203.1154.7184.7217.2150.4102.239.3
Nonconsolidated public sector15.611.613.664.3107.246.941.5
Interest earnings and dividends0.00.00.00.020.34.343.6
Capital revenue2.02.91.91.52.50.60.6
(In percent of GDP 1/)
Total revenue18.717.618.718.819.019.218.8
Tax revenue11.911.812.511.911.911.411.9
Direct taxes5.25.15.75.35.25.14.8
Income tax4.64.65.14.84.74.54.2
Wealth tax0.50.50.60.60.50.60.6
Taxes on foreign trade2.22.32.42.32.52.22.5
Export taxes0.20.20.10.10.10.10.0
Import taxes2.02.12.22.22.42.12.4
Taxes on domestic transactions4.64.54.54.34.14.14.5
Tobacco and beverages0.60.50.50.40.40.40.5
Value added tax1.91.91.91.91.91.81.9
Petroleum products1.31.21.21.21.11.01.2
Stamp taxes0.50.50.50.40.40.40.4
Other0.40.40.30.30.30.50.3
Grants0.00.00.10.10.81.21.1
Nontax revenue6.85.76.16.86.36.65.8
Panama Canal1.11.01.21.11.11.11.1
Oil pipeline royalties0.10.00.00.00.00.00.0
Services2.01.81.51.42.11.92.1
Transfers from rest of public sector3.62.93.34.22.93.41.8
Of which:
Consolidated public sector2.82.02.32.61.72.30.9
Nonconsolidated public sector0.20.10.20.81.21.10.9
Interest earnings and dividends0.00.00.00.00.20.10.9
Capital revenue0.00.00.00.00.00.00.0
Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Part-year percentages are annualized.

Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Part-year percentages are annualized.

Table 18.Panama: Central Government Expenditure
Prel.Preliminary

Jan.-Jun.
1993199419951996199719971998
(In percent of GDP 1/)
Total expenditure22.220.720.618.019.720.024.6
Current expenditure19.318.518.616.116.917.120.8
Wages and salaries7.86.96.96.96.76.56.8
Goods and services2.11.71.41.41.71.51.8
Interest4.04.55.03.03.73.23.4
Pensions and transfers5.45.25.34.74.55.28.2
Other0.10.10.10.10.30.70.6
Capital expenditure2.82.21.91.92.92.93.8
Investment2.21.51.41.42.32.33.1
Transfers0.60.70.50.50.60.60.7
Memorandum item:
Noninterest expenditure18.116.115.615.016.016.821.2
(Annual percent change)
Total expenditure12.8-0.51.8-8.616.622.029.4
Current expenditure7.21.93.2-10.011.614.527.8
Wages and salaries18.7-6.11.94.74.25.59.5
Goods and services20.3-10.2-16.60.631.127.327.8
Interest-14.420.512.6-36.219.2-12.610.0
Pensions and transfers8.14.32.9-7.52.240.863.5
Other-15.3-4.060.316.2427.0489.310.3
Capital expenditure74.8-16.5-10.64.457.9103.038.4
Investment120.4-28.8-1.73.767.7114.244.3
Transfers-1.830.2-28.96.330.372.618.2
Memorandum item:
Noninterest expenditure21.3-5.1-0.1-3.616.032.533.1
Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Part-year percentages are annualized.

Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Part-year percentages are annualized.

Table 19.Panama: Operations of the Social Security Agency
Prel.Preliminary

Jan.-Jun.
1993199419951996199719971998
(In millions of balboas)
Current revenue474.6522.3586.5613.5613.0324.4319.2
Contributions372.0396.3452.6475.0488.8243.4257.6
Professional risk premium34.235.040.538.536.818.019.1
Administered funds22.918.029.124.311.98.02.8
Income from investment29.839.053.859.558.528.030.4
Other15.734.010.516.217.027.19.3
Current expenditure609.9651.8720.2725.5780.6360.0388.5
Wages125.6134.3143.3151.4156.275.679.0
Goods and services75.082.2107.390.697.542.945.3
Transfers409.3435.3468.6482.6526.2241.1263.9
Domestic interest0.00.00.91.00.70.40.3
Operating balance (deficit -)-135.3-129.5-133.7-112.1-167.7-35.6-69.3
Current transfers (net)208.6211.7216.7170.7193.5107.1259.4
Transfers from central government209.0212.2216.7170.7194.0107.1259.6
Transfers to central government0.40.50.00.00.50.00.2
Capital revenue11.110.811.412.29.74.75.1
Saving 1/84.493.094.570.835.576.2195.2
Capital expenditure11.67.820.237.124.213.512.0
Fixed investment11.67.811.620.224.213.512.0
Financial investment0.00.08.616.90.00.00.0
Overall balance (deficit -)72.885.274.333.711.362.7183.2
(In percent of GDP 2/)
Current revenue6.56.87.47.47.07.56.9
Of which: Contributions5.15.15.75.85.65.65.6
Total expenditure8.68.59.49.39.28.68.7
Of which: Current8.48.49.18.88.98.38.4
Operating balance (deficit -)-1.9-1.7-1.7-1.4-1.9-0.8-1.5
Current transfers (net)2.92.72.72.12.22.55.6
Overall balance (deficit -)1.01.10.90.40.11.44.0
Sources: Social Security Agency; Ministry of Planning and Economic Policy; and Fund staff estimates.

Including capital revenue.

Part-year percentages are annualized.

Sources: Social Security Agency; Ministry of Planning and Economic Policy; and Fund staff estimates.

Including capital revenue.

Part-year percentages are annualized.

Table 20.Panama: Operations of the Decentralized Agencies 1/
Prel.Preliminary

Jan.-Jun.
1993199419951996199719971998
(In millions of balboas)
Operating revenue58.955.759.758.457.931.532.3
Operating expenditure129.4113.3116.7123.5135.760.863.1
Interest6.97.36.76.26.72.61.7
Other122.5106.0109.9117.3129.058.261.4
Operating balance (deficit -)-70.5-57.6-56.9-65.1-77.8-29.3-30.9
Current transfers (net)72.768.768.970.076.637.839.1
Transfers from central government61.168.868.974.576.637.839.1
Transfers to central government10.40.10.04.60.00.00.0
Transfers from public enterprises 2/22.00.00.00.00.00.00.0
Capital transfers from central government18.37.910.86.42.41.80.0
Capital revenue2.43.42.51.710.80.39.7
Saving 3/4.614.514.56.59.68.818.0
Capital expenditure4.59.611.520.323.011.710.5
Fixed investment17.119.613.615.623.011.710.5
Net lending-12.6-10.0-2.14.70.00.00.0
Overall balance (deficit -)18.412.813.8-7.3-11.0-1.17.4
(In percent of GDP) 4/
Operating revenue0.80.70.80.70.70.70.7
Operating expenditure1.81.51.51.51.51.41.4
Operating balance (deficit -)-1.0-0.7-0.7-0.8-0.9-0.7-0.7
Current transfers (net)1.00.90.90.80.90.90.8
Overall balance (deficit -)0.30.20.2-0.1-0.10.00.2

Includes the operations of the University of Panama, Human Development Institute (JFARHU), Agricultural Development Bank (BDA), Agricultural Marketing Institute (IMA), and National Mortgage Bank (BHN).

Transfers received to finance vocational training.

Including capital revenue.

Part-year percentages are annualized.

Includes the operations of the University of Panama, Human Development Institute (JFARHU), Agricultural Development Bank (BDA), Agricultural Marketing Institute (IMA), and National Mortgage Bank (BHN).

Transfers received to finance vocational training.

Including capital revenue.

Part-year percentages are annualized.

Table 21.Panama: Operations of the Public Enterprises 1/
Prel.Preliminary

Jan.-Jun.
1993199419951996199719971998
(In millions of balboas)
Current revenue714.2754.3749.7740.6637.6369.4260.3
Operating expenditure378.7385.0408.4447.2397.2226.4171.0
Wages and salaries150.3149.1169.4174.2122.571.150.5
Goods and services154.5158.7164.2152.3127.749.067.1
Transfers32.433.534.373.160.638.513.9
Other14.914.715.627.859.156.130.0
Interest26.629.024.919.627.311.79.5
Domestic1.61.11.00.812.53.73.4
External25.027.923.918.814.88.06.1
Operating balance (deficit -)335.5369.3341.3293.5240.4143.189.3
Current transfers net of taxes-211.8-154.1-181.9-210.4-147.4-101.1-38.6
Transfers from central government2.90.02.82.22.61.10.5
Transfers to central government-192.7-154.1-184.7-212.6-149.9-102.2-39.1
Transfers to rest of public sector-22.00.00.00.00.00.00.0
Capital revenue1.47.20.03.37.05.70.1
Capital transfers from central government18.318.80.11.95.50.70.0
Saving 2/125.1222.4159.486.4100.047.750.8
Capital expenditure103.9104.697.8104.396.264.565.3
Net borrowing0.00.00.048.0-30.0-30.00.0
Overall balance (deficit -)39.5136.761.732.0-20.7-46.1-14.5
(In percent of GDP 3/)
Current revenue9.89.89.59.07.38.55.6
Operating expenditure5.25.05.25.44.55.23.7
Operating balance (deficit -)4.64.84.33.62.73.31.9
Current transfers (net)-2.9-2.0-2.3-2.6-1.7-2.3-0.8
Capital expenditure1.41.41.21.31.11.51.4
Overall balance (deficit -)0.51.80.80.4-0.2-1.1-0.3
Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Includes the operations of the Hydraulic Resources and Electricity Institute (IHRE), National Telecommunications Institute (INTEL) (until May 1997), Colon Free Zone (operating agency), Civil Aviation Authority, National Water and Sewerage Institute (IDAAN), La Victoria Sugar Corporation, Tourism Institute, Bayano Cement Plant (until September 1994), and the Port Authority which on March 1, 1997 privatized about three quarters of its operations.

Including capital revenue.

Part-year percentages are annualized.

Sources: Office of the Comptroller General; Ministry of Planning and Economic Policy; and Fund staff estimates.

Includes the operations of the Hydraulic Resources and Electricity Institute (IHRE), National Telecommunications Institute (INTEL) (until May 1997), Colon Free Zone (operating agency), Civil Aviation Authority, National Water and Sewerage Institute (IDAAN), La Victoria Sugar Corporation, Tourism Institute, Bayano Cement Plant (until September 1994), and the Port Authority which on March 1, 1997 privatized about three quarters of its operations.

Including capital revenue.

Part-year percentages are annualized.

Table 22.Panama: Nonfinancial Public Sector Gross Domestic Debt(In millions of balboas; end of period)
June
199319941995199619971998
Consolidated nonfinancial public sector1,010.81,003.5946.11,136.61,198.01,154.0
Loans41.541.837.0207.0259.9220.0
Securities969.2961.7909.2929.5938.1934.0
General government974.21,019.5964.31,159.41,180.91,166.1
Loans5.06.33.6177.4207.2196.6
Securities969.21,013.2960.6982.0973.7969.5
Central government1,814.61,794.71,670.71,792.21,735.61,836.1
Loans32.231.125.8196.7223.2210.9
Securities1,782.41,763.61,644.91,595.51,512.41,625.2
Of which: Short term15.615.618.582.1125.0125.0
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.

7. In the context of low inflation, the monetary and credit aggregates grew at a faster pace than real GDP. Broad money grew by an annual average of about 10½ percent a year during 1993-96, while private sector credit grew by around 13½ percent a year (Table 23 and 24). While the public sector continued to build up deposits in the domestic banking sector during 1993-95, there was a further accumulation of external arrears. The clearing of most of these arrears and the debt-reduction operations in 1996 led to an increase in bank credit to the public sector. The net foreign assets of the banking system increased from US$1.9 billion in 1993 to about US$2.5 billion in 1996, of which 38 percent (US$952 million) was held by the National Bank of Panama (BNP). Interest rates continued to track international market developments and the spread between deposit and lending rates declined slightly from 1.5 percentage points in 1993 to 0.8 percentage point in 1996.

Table 23.Panama: Accounts of the Banking System 1/(In millions of balboas; end of period)
DecemberJune
1993199419951996199719971998
I. National Bank of Panama
Net foreign assets485.5631.6708.7952.11,082.31,029.31,267.0
Assets597.1703.9780.51,016.51,147.21,092.91,328.1
Reserve position with IMF16.317.317.617.116.016.515.8
SDR holdings 2/0.00.00.00.00.00.00.0
Foreign currencies43.891.976.5253.177.151.145.3
Brady bonds0.00.00.0150.00.00.00.0
Deposits abroad537.0594.7686.5596.31,054.21,025.41,267.0
Liabilities 3/106.667.767.159.660.959.155.5
Deposits from nonresidents5.04.74.74.74.14.55.7
Net domestic reserves504.1597.0787.6352.9515.5497.4524.5
Domestic currency2.22.62.22.22.22.31.6
Interbank deposits (net)480.3568.6742.0321.1487.0478.0500.7
Checks in clearing21.625.843.429.626.417.122.2
Net domestic assets-456.6-704.8-924.0-893.3-1,151.2-1,116.3-1,358.2
Public sector (net)-627.3-843.5-1,025.3-853.1-1,076.1-1,063.2-1,235.9
Central government (net)473.6479.8433.3609.7399.2430.3301.0
Rest of public sector (net)-1,100.9-1,323.3-1,458.6-1,462.7-1,475.21,493.5-1,536.9
Of which: Social Security-529.8-659.8-812.6-865.4-974.8-919.8-1,042.4
Private sector323.0300.9318.8301.0322.4321.0298.5
Official capital and surplus-159.8-189.8-258.6-387.1-436.0-405.1-465.6
Valuation adjustment-19.8-21.1-21.5-20.8-19.5-20.1-19.3
Unclassified assets (net)27.348.862.666.658.051.164.1
Long-term foreign liabilities202.4199.5251.573.866.173.366.7
Of which:
FIVEN104.2104.2104.20.00.00.00.0
PEMEX68.668.668.60.00.00.00.0
Other29.526.778.773.866.173.366.7
U.S. AID facility53.329.09.31.20.91.00.8
SDR allocation36.138.439.137.835.536.535.0
Liabilities to the private sector241.2256.9272.4298.9344.1299.6330.7
Demand deposits49.660.163.067.695.960.571.7
Time deposits117.6113.4114.6117.7118.4127.5117.0
Savings deposits69.779.190.3109.5126.0107.4136.0
Cashier’s checks in circulation4.34.34.54.13.74.26.0
II. Private Banks
Net foreign assets1,398.31,770.81,734.11,529.51,770.11,727.21,289.3
Assets3,711.75,697.14,635.65,230.15,266.55,579.73,520.7
Foreign currencies97.1104.1105.3119.7149.5104.8117.4
Deposits abroad3,212.74,466.13,505.83,881.84,490.33,970.62,803.1
Other unclassified401.81,126.91,024.41,228.6626.61,504.2600.2
Liabilities529.5899.41,138.3956.0539.21,042.3491.1
Overseas operations (net)-1,783.8-3,026.91,763.2-2,744.7-2,957.2-2,810.2-1,740.2
Credit to nonresidents9,023.110,919.611,028.310,253.611,328.710,471.110,258.7
Deposits from nonresidents9,447.511,566.19,992.79,531.110,612.410,008.18,311.8
Foreign banks6,650.78,550.76,641.46,267.17,472.76,878.95,721.1
Private nonresidents2,796.83,015.43,351.33,263.93,139.73,129.22,590.7
Other foreign liabilities1,359.42,380.52,798.83,467.23,673.53,273.13,687.2
Net domestic reserves-567.1-684.4-858.8-614.3-722.1-861.3-808.5
Domestic currency7.514.416.410.114.710.78.5
Interbank deposits (net)-574.6-698.8-875.1-624.4-736.9-872.1-817.0
Net domestic assets4,118.04,809.15,498.45,980.36,925.36,333.07,804.1
Public sector (net)104.874.362.379.3151.953.7156.1
Credit104.874.362.379.4152.053.7156.1
Deposits0.00.00.00.00.00.00.0
Private sector4,332.55,118.65,852.46,347.67,237.56,708.28,120.8
Unclassified assets (net)-319.3-383.8-416.3-446.6-464.1-428.9-472.8
Liabilities to private sector4,949.25,895.46,373.76,895.57,973.37,198.98,284.9
Monetary liabilities3,941.24,574.14,941.95,234.76,028.25,503.06,286.5
Demand deposits645.2728.6737.7758.3889.7733.6845.0
Time and savings deposits3,296.03,845.54,204.24,476.55,138.64,769.45,441.5
Time deposits2,635.03,136.23,483.23,672.54,203.13,924.64,445.0
Savings deposits661.0709.2721.0804.0935.5844.9996.5
Private capital and surplus1,008.01,321.31,431.81,660.81,945.11,695.91,998.3
III. Savings Bank
Net foreign assets7.95.49.07.36.66.36.3
Net domestic reserves13.060.1118.4145.0161.4165.6176.2
Domestic currency0.20.90.20.10.20.10.1
Deposits in local banks (net)10.755.1114.2142.1157.9160.5171.8
Demand deposits10.410.60.62.23.84.52.8
Time deposits45.678.2127.3165.0188.7187.1181.2
Deposits of banks-45.3-33.7-13.7-25.1-34.7-31.1-12.1
Checks in clearing 4/2.24.14.12.83.35.04.3
Net domestic assets248.3215.8189.0176.7188.1174.7186.0
Public sector (net)-0.7-31.9-67.6-77.1-86.6-96.7-106.5
Central government1.11.12.25.94.70.74.7
Loans and advances1.11.12.25.94.70.74.7
Deposits0.00.00.00.00.00.00.0
Rest of public sector-1.8-32.9-69.8-83.0-91.3-97.4-111.1
Loans and advances0.00.00.00.0-18.0-18.0-18.0
Deposits 5/-1.8-32.9-69.8-83.0-73.3-79.4-93.1
Private sector325.5336.1349.6353.3388.3375.1397.7
Loans and discounts325.4336.0349.5353.2356.8355.6364.7
Investment0.10.10.10.131.419.533.0
Unclassified assets (net)0.0-5.5-4.0-19.1-22.9-21.0-12.0
Official capital and surplus-76.6-82.9-89.0-80.4-90.7-82.6-93.1
Long-term foreign liabilities10.410.19.18.18.18.67.5
Liabilities to private sector258.4270.9306.4319.9348.0338.1361.1
Demand deposits9.411.215.47.36.36.65.5
Time and savings deposits249.0259.7291.0312.5341.7331.5355.6
Time deposits103.999.0111.8113.5132.6120.9132.1
Savings deposits145.1160.7179.2199.1209.2210.6223.5
IV. Consolidated Banking System
Net foreign assets1,891.72,407.82,451.92,488.92,859.02,762.82,562.6
Assets4,316.66,406.45,425.16,253.86,420.36,678.94,855.2
Liabilities636.1967.01,205.31,015.6600.01,101.4546.6
Overseas operations (net)-1,788.8-3,031.6-1,767.9-2,749.3-2,961.3-2,814.6-1,745.9
Credit to nonresidents9,023.110,919.611,028.310,253.611,328.710,471.110,258.7
Deposits from nonresidents9,452.511,570.79,997.49,535.810,616.510,012.68,317.4
Other foreign liabilities1,359.42,380.52,798.83,467.23,673.53,273.13,687.2
Net domestic assets3,802.04,259.44,796.95,142.35,912.45,187.96,517.3
Public sector (net)-523.3-801.1-1,030.6-850.8-1,010.81,106.3-1,186.3
Credit1,062.6983.4931.01,139.11,112.4998.41,105.2
Deposits-1,585.9-1,784.5-1,961.7-1,990.0-2,123.1-2,104.7-2,291.5
Private sector4,981.15,755.66,520.97,002.07,948.17,404.38,816.9
Official capital and surplus-236.3-272.8-347.6-467.5-526.7-487.8-558.7
Net domestic reserves-54.3-31.742.8-119.2-48.9202.6-113.8
Domestic currency9.917.918.812.517.113.110.2
Net interbank deposits-83.6-75.2-18.9-161.2-92.0-233.6-144.4
Checks in clearing 4/23.829.947.533.529.722.126.4
Cashier’s checks in circulation-4.3-4.3-4.5-4.1-3.7-4.2-6.0
Unclassified assets (net)-311.8-361.6-379.2-421.0-448.5-418.8-440.0
Valuation adjustments-19.8-21.1-21.5-20.8-19.5-20.1-19.3
Other assets (net)-292.0-340.5-357.7-400.2-429.0-398.8-420.8
U.S. AID facility53.329.09.31.20.91.00.8
Long-term foreign liabilities213.1209.9261.682.974.281.874.3
SDR allocation36.138.439.137.835.536.535.0
Liabilities to domestic private sector5,444.56,418.96,948.17,510.28,661.77,832.38,970.6
Monetary liabilities4,436.55,097.55,516.25,849.46,716.66,136.46,972.3
Demand deposits704.2799.9816.1833.2991.9800.6922.3
Time and savings deposits3,732.34,297.74,700.15,016.25,724.85,335.86,050.0
Time deposits2,856.53,348.73,709.73,903.64,454.14,172.94,694.0
Savings deposits875.8949.0990.51,112.61,270.71,162.91,356.0
Private capital and surplus1,008.01,321.31,431.81,660.81,945.11,695.91,998.3
Sources: National Bank of Panama, Superintendency of Banks, and Savings Bank.

Excludes operations of international banks which are licensed to perform only offshore transactions, but includes the offshore activities of banks licensed to perform both domestic and offshore transactions.

Not included in BNP accounts, but in central government accounts.

Excluding the use of Fund credit

Includes bonds issued by the central government during 1988-89 in lieu of payment in cash to government employees for a 13-month salary bonus.

Increases from 1994 reflect deposits of the Social Security Agency (CSS).

Sources: National Bank of Panama, Superintendency of Banks, and Savings Bank.

Excludes operations of international banks which are licensed to perform only offshore transactions, but includes the offshore activities of banks licensed to perform both domestic and offshore transactions.

Not included in BNP accounts, but in central government accounts.

Excluding the use of Fund credit

Includes bonds issued by the central government during 1988-89 in lieu of payment in cash to government employees for a 13-month salary bonus.

Increases from 1994 reflect deposits of the Social Security Agency (CSS).

Table 24.Panama: Summary Operations of the Banking System
DecemberJune
1993199419951996199719971998
(In percent of GDP)
Net domestic assets50.652.657.560.363.056.363.5
Public sector (net)-5.4-8.6-11.6-11.4-10.6-12.3-12.4
Private sector62.569.477.682.085.180.388.0
Other-6.4-8.2-8.5-10.3-11.6-11.7-12.1
Liabilities to domestic private sector70.176.784.587.792.184.991.2
Monetary liabilities56.961.667.168.971.666.771.1
Demand deposits9.29.710.210.010.48.69.3
Time and savings deposits47.751.956.958.961.258.161.8
Time deposits36.740.144.646.247.645.648.1
Savings deposits11.111.812.312.813.612.513.7
Private capital and surplus13.115.117.418.820.518.120.0
(12-month change) 1/
Net domestic assets8.38.48.45.010.36.917.0
Public sector (net)-5.5-5.1-3.62.6-2.1-0.8-1.0
Private sector19.014.211.96.912.610.118.0
(12-month percent change)
Liabilities to domestic private sector15.317.98.28.115.310.814.5
Monetary liabilities16.014.98.26.014.810.013.6
Money11.213.62.02.119.012.815.2
Quasi-money17.015.19.46.714.19.613.4
Time deposits16.117.210.85.214.18.712.5
Savings deposits20.18.34.412.314.212.816.6
Sources: Office of the Comptroller General, National Bank of Panama, Superintendency of Banks, Savings Bank; and Fund staff estimates.

In relation to liabilities to the private sector at the beginning of the period.

Sources: Office of the Comptroller General, National Bank of Panama, Superintendency of Banks, Savings Bank; and Fund staff estimates.

In relation to liabilities to the private sector at the beginning of the period.

8. After recording deficits for most of the 1990s, the overall balance of payments shifted to a surplus in 1996 mainly because of lower interest obligations and a recovery in net re-exports from the ZLC. With the economic recovery, imports increased significantly, widening the trade deficit. This was partly offset in 1994 by strong growth in canal traffic, ZLC net re-exports, and related transportation activity. In 1996 the trade deficit was more than offset by net capital inflows, including direct investment mainly in tourism and port projects.

9. To normalize relations with private creditors and bilateral lenders, action was taken to settle arrears and reduce external debt and debt service in 1994-96. In 1994 the government completed an external bond exchange, settling arrears with private creditors of about US$425 million, while the BNP settled US$103 million in interbank deposit arrears with commercial banks that had been outstanding since 1984. In 1995 about US$60 million of enterprise debt owed to commercial banks that had fallen into arrears was restructured. In July 1996 a debt and debt-service reduction operation was concluded resulting in a 29 percent reduction on three-fourths of the external debt, including a debt package of US$3.8 billion with commercial banks (with the government issuing Brady bonds) and oil debt obligations with Mexico and Venezuela totaling US$308 million.1 As a result of these operations, in 1996 interest relief amounted to 2 percentage points of GDP. External debt declined from 75 percent of GDP in 1993 to about 62 percent of GDP in 1996.

C. Developments in 1997

10. In 1997 the government continued to implement its medium-term economic program. The reforms enacted in 1997 included further privatization (port and telecommunications services), trade reform, and steps to convert the supplementary civil servants pension fund into a voluntary self-financed plan. In addition, the government began to reorient government expenditure to social priorities, improve CSS operations, and to encourage investment in the canal zone areas reverting to Panama. In December 1997, the IMF Board approved an extended arrangement with Panama to support the continued implementation of the government’s program.

11. Economic growth in 1997 rose to 4½ percent with both private and public investment rising, inflation remaining low and unemployment declining (Figure 1). Following privatization, significant investment to modernize two major sea ports led to a strong pick up in activity in the ZLC and in the ports. Privatization of telecommunications (including the national phone company and cellular services) also fostered an expansion of these services. At the same time, several new mining and construction projects began, while tourism related services continued to grow at a moderate pace. While national saving grew, investment rose at a faster pace and the external current account deficit widened to 3 percent of GDP in 1997.

Figure 1.Panama Real Sector Developments

Sources: Panamanian authorities; and Fund staff estimates.

12. Trade reform2 and lower world prices for food products contributed to a decline in the inflation rate in 1997. The 12-month change in the CPI was negative (0.5 percent) in 1997; wholesale prices declined by 3.9 percent (a decline of 6.3 percent for wholesale imports) (Table 11). As regards unemployment trends, the unemployment rate declined to 13.4 percent in August 1997 (from 14.3 percent in August 1996), and preliminary data suggest that it remained at that same level in August 1998.

Public sector

13. The overall balance of the nonfinancial public sector moved from a small surplus in 1996 to a deficit of 0.3 percent of GDP in 1997 reflecting the fiscal cost of structural reforms initiated in 1996 (Figure 2). Nevertheless, privatization proceeds contributed to a build-up in the net foreign assets of the nonfinancial public sector in 1997 (Table 15).

Figure 2.Panama Public Sector Operations

(In percent of GDP)

Sources: Panamanian authorities; and Fund staff estimates.

1/ Includes Central Government non-tax revenue, and revenues of the Social Security Agency (CSS) and the decentralized agencies.

14. The central government balance also shifted from a small surplus in 1996 to a small deficit in 1997 (Table 16). Revenue fell by ½ percent of GDP; with tax revenue remaining steady (in part due to improved tax administration and buoyant economic activity and despite trade liberalization), and nontax revenue (particularly transfers from the rest of the public sector) declining following the privatizations (Table 17). In relation to GDP, total expenditure increased in 1997 as a result of automatic wage increases, higher spending on goods and services, and improved implementation of investment projects (Table 18). Further debt-reduction operations (described below) resulted in an increase in external interest expenditure in 1997.

15. The operating deficit of the Social Security Agency continued to widen in 1997 because of the higher pension payments and spending on medical services outstripped the revenue enhancements achieved through administrative reforms, including door-to-door inquiries and collections. The overall surplus of the CSS continued to deteriorate (to 0.1 percent of GDP) in 1997 (Table 19).3 To safeguard the actuarial integrity of the CSS, a study was initiated with technical support from the International Labor Organization to review the long-term funding aspects of the pension scheme and other benefits program. The report circulated in mid-1998 for public discussion suggests that cash deficits could occur in about a decade.

16. The decentralized agencies, including the University of Panama, continued to incur operating deficits that needed to be funded through central government transfers of about 1 percent of GDP in 1997 (Table 20).

17. The operating surplus of the public enterprises declined mainly as a result of privatizations to 2.7 percent of GDP in 1997 (compared with 3.6 percent of GDP in 1996), especially due to the sale of the telephone company to the private sector (Table 21). Continued high losses in certain public utilities (from system leakages and illegal connections) accounted for weak revenue collections. Privatization also explained the continued decline in public enterprise investment to slightly under 1.1 percent of GDP in 1997.

Monetary sector

18. Bank liabilities and credit to the private sector have continued to grow somewhat faster than GDP. The growth of the banking system’s liabilities to the private sector increased to 15½ percent in 1997 (from 8 percent in 1996) and remained high (14½ percent) in the year ended in June 1998 (Table 23). Growth was particularly strong in demand and saving deposits (Table 25). Similarly, domestic credit to the private sector increased by 13½ percent in 1997 (from 10½ percent in 1996), and accelerated to 19 percent in the year ended June 1998. Credit to finance commercial and financial activity as well as personal consumption has grown rapidly in recent years (Table 28). With a high level of liquidity in the system, the net foreign assets of the banking system rose to US$2.9 billion at end-1997 (3214 percent of GDP), an increase of 2.3 percent relative to private sector liabilities at the beginning of the year. Following international trends, commercial lending rates declined to 10.2 percent by end-1997 (and to 9.9 percent in June 1998) while deposit rates have remained stable (Figure 3).

Table 25.Panama: Private Sector Deposits
DecemberJune
1993199419951996199719971998
(In millions of balboas; end of period)
Total private sector deposits4,436.55,097.55,516.25,849.46,716.66,136.46,972.3
Demand704.2799.9816.1833.2991.9800.6922.3
National bank49.660.163.067.695.960.571.7
Savings bank9.411.215.47.36.36.65.5
Private banks645.2728.6737.7758.3889.7733.6845.0
Time and savings3,732.34,297.74,700.15,016.25,724.85,335.86,050.0
National bank187.3192.5204.9227.2244.4234.9252.9
Savings bank249.0259.7291.0312.5341.7331.5355.6
Private banks3,296.03,845.54,204.24,476.55,138.64,769.45,441.5
Time deposits2,856.53,348.73,709.73,903.64,454.14,172.94,694.0
National bank117.6113.4114.6117.7118.4127.5117.0
Savings bank103.999.0111.8113.5132.6120.9132.1
Private banks2,635.03,136.23,483.23,672.54,203.13,924.64,445.0
Savings deposits875.8949.0990.51,112.61,270.71,162.91,356.0
National bank69.779.190.3109.5126.0107.4136.0
Savings bank145.1160.7179.2199.1209.2210.6223.5
Private banks661.0709.2721.0804.0935.5844.9996.5
(12-month percent change)
Total private sector deposits16.014.98.26.014.810.013.6
Demand11.213.62.02.119.012.815.2
Time and savings17.015.19.46.714.19.613.4
Time16.117.210.85.214.18.712.5
Savings20.18.34.412.314.212.816.6
Sources: National Bank of Panama; Savings Bank; and Superintendency of Banks.
Sources: National Bank of Panama; Savings Bank; and Superintendency of Banks.
Table 26.Panama: Offshore Operations of Private Banks 1/(In billions of U.S. dollars; end of period)
DecemberJune
1993199419951996199719971998
Foreign assets17.422.922.721.622.921.621.8
Foreign reserves5.48.47.07.37.77.75.8
General license banks3.75.74.65.25.35.63.5
Offshore banks 2/1.72.72.42.02.42.12.3
Credit to nonresidents12.014.515.714.315.214.016.0
General license banks9.111.011.110.311.310.510.3
Offshore banks2.93.54.64.03.93.55.7
Foreign liabilities15.820.820.719.920.919.920.5
Short-term liabilities0.71.11.31.10.71.20.8
General license banks0.50.91.11.00.51.00.5
Offshore banks0.20.30.20.10.20.10.3
Deposits from nonresidents13.617:216.515.316.515.415.8
General license banks9.411.610.09.510.610.08.3
Offshore banks4.25.76.65.85.95.47.5
Other liabilities1.42.42.83.53.73.33.8
General license banks1.42.42.83.53.73.33.7
Offshore banks0.00.00.00.00.10.00.1
Capital and reserves0.30.30.30.30.40.30.3
Source: Superintendency of Banks.

Includes offshore operations of international license banks.

Refers to international license banks.

Source: Superintendency of Banks.

Includes offshore operations of international license banks.

Refers to international license banks.

Table 27.Panama: Interest Rate Structure(Simple average)
January-June
1993199419951996199719971998
Lending rates (less than one year)
Commercial9.610.210.610.510.210.39.9
Industrial9.39.810.110.19.39.88.9
Personal12.512.512.612.212.612.012.6
Deposit rate (six-month) 1/4.95.56.56.46.26.26.2
U.S. Prime rate (six-month)6.07.18.88.58.58.48.5
LIBOR (six-month)3.45.16.15.65.95.95.8
Difference between deposit rate and LIBOR1.50.40.40.80.30.30.4
Sources: Superintendency of Banks; and International Financial Statistics.

Domestic deposit rate.

Sources: Superintendency of Banks; and International Financial Statistics.

Domestic deposit rate.

Table 28.Panama: Banking System Credit to the Private Sector by Economic Activity(End of period)
June
1993199419951996199719971998
(In millions of balboas)
Total4,7235,4206,1196,4747,2126,7407,971
Commerce2,0862,3942,6712,5682,8962,6683,309
Housing1,1831,3341,4931,6491,8441,7371,977
Other construction125150187297278295262
Manufacturing263286367371415395450
Personal consumption6407488499481,0979861,271
Financial and insurance enterprises184215237300362324380
Agriculture108124130137129139128
Livestock117144161155150148147
Fishing17252628272535
Other00021142312
(12-month percent change)
Total24.214.812.95.811.47.818.3
Commerce24.514.811.6-3.812.81.424.0
Housing15.612.811.910.511.89.813.8
Other construction22.520.024.858.6-6.430.5-11.2
Manufacturing21.88.728.31.111.915.513.9
Personal consumption43.816.913.511.715.714.328.9
Financial and insurance enterprises46.016.810.426.420.714.917.3
Agriculture28.614.84.65.6-5.87.2-7.9
Livestock8.323.111.7-3.6-3.2-8.0-0.7
Fishing-32.047.12.29.6-3.6-16.740.0
(In percent of total credit)
Total100.0100.0100.0100.0100.0100.0100.0
Commerce44.244.243.639.740.239.641.5
Housing25.024.624.425.525.625.824.8
Other construction2.62.83.14.63.94.43.3
Manufacturing5.65.36.05.75.85.95.6
Personal consumption13.613.813.914.615.214.615.9
Financial and insurance enterprises3.94.03.94.65.04.84.8
Agriculture2.32.32.12.11.82.11.6
Livestock2.52.72.62.42.12.21.8
Fishing0.40.50.40.40.40.40.4
Source: Superintendency of Banks.
Source: Superintendency of Banks.

Figure 3.Panama Monetary Developments

Sources: Panamanian authorities; and Fund staff estimates.

19. New banking legislation that became effective in June 1998 incorporated the recommendations of the Basel Committee on banking supervision, including consolidated supervision of banks that are licensed for offshore and other international operations. The new law strengthens banking supervision through the establishment of a new superintendency with broad power. Foreign assets of offshore banks amounted to about US$23 billion a year from 1994 to 1997, and declined to about US$22 billion in June 1998, as a result of the withdrawal of one bank from Panama (Table 26).

EBS/98/208

Corrected: 12/18/98

20. The new banking law and prudential standards now also apply to state banks. In addition, plans for restructuring their operations are currently being developed. The operating profits of the Savings Bank and National Mortgage Bank (BHN) in 1997 were marginally lower than in 1996 (Table 29). Despite increased operating expenditure, the performance of the two banks in early 1998 improved over the same period in 1997. While the Savings Bank improved its investment performance, the Mortgage Bank was more successful in collecting loan payments. On the other hand, the Agriculture Development Bank recorded operating losses in 1997 and in the first six months of 1998, in part because of drought (El Niño) which affected its relatively large agricultural portfolio.

Table 29.Panama: Public Sector Banks-Operating Revenue and Expenditure(In millions of balboas)
June
1993199419951996199719971998
I. National Bank of Panama
Operating profits or losses (-)33.733.259.957.744.823.818.2
Operating revenue62.062.489.188.176.738.933.8
Net interest52.651.678.177.765.333.729.3
Interest receipts (cash)89.698.5139.3142.4144.270.169.4
Accrued91.1104.5143.5143.7148.566.482.6
Not yet collected 1/-1.5-6.0-4.2-1.3-4.43.6-13.2
Interest payments accrued-37.0-46.9-61.2-64.7-78.9-36.4-40.2
Noninterest income 2/9.410.811.110.311.45.34.5
Operating expenditure28.329.229.230.432.015.215.6
Wages and salaries19.319.219.119.620.410.010.0
Goods and services8.28.48.710.211.04.95.4
Other 3/0.81.61.30.60.60.20.1
II. Savings Bank
Operating profits or losses (-)4.44.01.54.63.30.42.4
Operating revenue17.918.318.322.121.910.811.6
Net interest10.912.913.916.316.98.59.5
Interest receipts (cash)28.031.237.743.447.923.325.3
Accrued35.238.744.445.750.324.526.4
Loans32.635.736.536.336.218.318.4
Fixed deposits2.53.07.89.312.35.66.5
Investments0.00.10.10.11.80.51.5
Not yet collected-7.2-7.5-6.7-2.4-2.3-1.2-1.2
Interest payments accrued-17.1-18.3-23.8-27.1-31.1-14.8-15.7
Noninterest income7.05.44.45.85.12.32.1
Operating expenditure (cash)13.514.316.817.518.610.39.2
Expenditure15.115.920.621.020.710.010.4
Of which:
Depreciation-1.0-1.4-1.5-1.5-1.40.7-0.7
Provisions for bad loans-0.6-0.2-2.3-2.0-0.7-0.4-0.5
III. National Mortgage Bank
Operating profits or losses (-)5.79.05.44.23.2-0.91.1
Operating revenue12.616.413.014.213.83.96.4
Net interest6.86.67.17.97.91.93.7
Interest receipts (cash)14.714.915.115.614.85.47.2
Loans13.813.313.514.313.84.96.8
Fixed deposits0.81.01.20.90.90.40.4
Investments0.10.60.40.30.10.00.0
Interest payments (cash)7.98.38.07.76.83.53.5
Noninterest income5.89.85.96.35.92.02.8
Operating expenditure (cash)6.97.37.69.910.64.85.4
Wages and salaries2.62.93.43.43.91.81.8
Goods and services4.34.54.26.66.73.03.5
IV. Agricultural Development Bank
Operating profits or losses (-)-1.2-2.5-3.3-3.0-3.8-2.0-1.9
Operating revenue4.83.22.82.11.40.50.6
Net interest4.32.92.51.80.70.30.3
Interest receipts (cash)8.67.96.75.94.82.42.2
Interest payments accrued4.34.94.24.14.12.11.9
Interest payments (cash)4.34.63.93.83.61.81.6
Noninterest income0.60.30.30.30.70.20.3
Operating expenditure (cash)6.05.76.15.15.22.52.5
Wages and salaries4.24.14.53.63.71.81.8
Goods and services1.00.90.90.90.90.40.4
Other0.80.70.70.60.60.30.3
Sources: National Bank of Panama; Savings Bank; National Mortgage Bank; and Agricultural Development Bank

Difference of interest receivable at the beginning and at the end of the period.

In 1993 excludes B 12.7 million of reversion of reserves for bad loans.

Includes exchange losses of B 0.4 million in 1993, B 1.2 million in 1994, and B 0.9 million in 1995 on repayments, and exchange profit of B 0.5 million in 1996.

Sources: National Bank of Panama; Savings Bank; National Mortgage Bank; and Agricultural Development Bank

Difference of interest receivable at the beginning and at the end of the period.

In 1993 excludes B 12.7 million of reversion of reserves for bad loans.

Includes exchange losses of B 0.4 million in 1993, B 1.2 million in 1994, and B 0.9 million in 1995 on repayments, and exchange profit of B 0.5 million in 1996.

21. While for private banks, the ratio of nonperforming loans to total lending has remained low, in the case of state banks, this ratio fell from 14.8 percent in 1996 to 10.6 percent by end-1997, but rose slightly to 11.4 percent in June 1998 as further arrears accumulated (Table 30). The BHN forgave over US$35 million in interest arrears during 1997 (see Chapter II) and the Agricultural Development Bank began a much smaller program of debt forgiveness in July 1997.

Table 30.Panama: Public Sector Banks-Portfolio in Arrears(In millions of balboas at end-year)
June
1993199419951996199719971998
I. National Bank of Panama
Total private sector portfolio 1/269.5262.2276.9268.6260.6258.4256.8
Commerce44.539.739.136.843.437.142.7
Agriculture and forestry69.176.678.079.681.778.879.4
Personal loans105.591.599.592.675.985.072.9
Others50.354.460.259.659.657.561.9
Loans overdue17.612.710.711.511.111.111.3
Commerce8.36.24.34.13.33.82.8
Agriculture and forestry4.93.53.74.44.74.24.8
Personal loans0.80.81.00.91.11.51.4
Others3.62.11.72.12.01.62.2
Loans overdue17.612.710.711.511.111.111.3
Between 30 and 90 days4.84.63.85.14.84.55.3
Over 90 days12.88.16.96.46.46.65.9
Loans overdue (in percent)100.0100.0100.0100.0100.0100.0100.0
Between 30 and 90 days27.336.235.244.642.840.847.4
Over 90 days72.763.864.855.457.259.252.6
Share of arrears in total portfolio (in percent)6.54.83.94.34.34.34.4
Commerce18.615.610.911.17.610.36.5
Agriculture and forestry7.14.64.85.55.85.46.1
Personal loans0.80.91.01.01.51.72.0
Others7.23.92.83.63.42.83.6
II. Savings Bank
Total portfolio313.6324.6336.9351.8355.0355.5364.7
Mortgages233.0252.1265.4275.1285.8281.4288.5
Personal loans72.261.460.262.155.058.660.1
Other8.411.011.414.614.215.516.1
Loans overdue69.368.561.653.254.655.357.7
Mortgages62.958.649.844.344.044.245.8
Personal loans5.28.111.16.48.28.58.5
Other1.21.80.72.52.42.63.4
Loans overdue 2/69.368.561.653.254.655.357.7
Between two and nine months32.531.529.5
More than nine months36.937.132.2
Loans overdue (in percent)100.0100.0100.0100.0100.0100.0100.0
Between two and nine months46.845.947.8
More than nine months53.254.152.2
Share of arrears in total portfolio (in percent)22.121.118.315.115.415.615.8
Mortgages27.023.218.816.115.415.715.9
Personal loans7.213.218.510.314.914.514.1
Other14.716.46.017.116.916.821.1
III. National Mortgage Bank 3/
Total portfolio153.8166.6174.4188.5195.4192.6198.6
Total arrears34.838.542.245.68.143.211.9
Share of arrears in total portfolio (in percent)22.723.124.224.24.122.46.0
IV. Agricultural Development Bank 4/
Total portfolio89.981.476.674.276.172.979.7
Loans overdue10.021.620.420.719.923.021.5
Between 30 and 90 days1.33.30.71.01.12.51.6
More than 90 days8.718.319.719.718.820.519.9
Loans overdue (in percent)100.0100.0100.0100.0100.0100.0100.0
Between 30 and 90 days13.315.53.44.95.510.97.3
More than 90 days86.784.596.695.194.589.192.7
Share of arrears in total portfolio (in percent)11.226.526.727.926.131.527.0
Sources: National Bank of Panama; Savings Bank; National Mortgage Bank; and Agricultural Development Bank.

Central government overdrafts of B 932 million accumulated during the crisis of the late 1980s were regularized in 1993, and no public sector arrears remain.

From 1996 onwards refers to loans overdue more than 91 days.

The portfolio includes bad loans related to projects, financed through the Ministry of Housing, aimed at solving social problems.

From 1993 onward, the portfolio excludes bad loans.

Sources: National Bank of Panama; Savings Bank; National Mortgage Bank; and Agricultural Development Bank.

Central government overdrafts of B 932 million accumulated during the crisis of the late 1980s were regularized in 1993, and no public sector arrears remain.

From 1996 onwards refers to loans overdue more than 91 days.

The portfolio includes bad loans related to projects, financed through the Ministry of Housing, aimed at solving social problems.

From 1993 onward, the portfolio excludes bad loans.

Table 31.Panama: Balance of Payments 1/
19931994199519961997
CreditDebitBalanceCreditDebitBalanceCreditDebitBalanceCreditDebitBalanceCreditDebitBalance
(In millions of U.S. dollars)
Current account7,917.88,074.2-156.48,778.38,808.6-30.39352.09,621.3269.38,710.68,842.9-132.39,826.410,990.7-264.3
Goods and services7,72338,040.8-317.58,592.88,772.0-179.29,167.89,591.4-423.58,527.08,812.7-285.79,633.610,060.5-426.8
Commodity trade5,413.65,747.0-333.46,040.16,288.6-248.66,100.16,669.3-569.25,723.96,234.5-510.66,675.27,268.7-593.4
Nonpetroleum exports (f.o.b.)5,311.50.05,311.55,932.60.05,932.65,954.40.05,954.45,556.50.05,556.56,501.40.06,501.4
Petroleum trade (fo.b.)102.1266.0-163.9107.4299.1-191.7145.8303.5-157.7167.4394.9-227.5173.8371.9-198.1
Nonpetroleum imports (f.o.b.)0.05,481.0-5,481.00.05,989.5-5,989.50.06,365.8-6,365.80.05,925.2-5,925.20.06,896.8-6,896.8
Freight and insurance28.2636.3-608.127.6710.3-682.726.3709.7-683.515.0646.2-631.215.2748.3-733.2
Of which: ZLC0.0424.9-424.90.0475.1-475.10.0475.0-475.00.0407.8-407.80.0482.4-482.4
Transportation603.763.6540.1667.170.8596.3728.876.5652.3740.4107.7632.7767.776.7690.9
Travel225.7122.5103.2261.6122.2139.4310.4127.5182.9343.1135.8207.3374.2137.4236.8
Investment income947.41,318.7-371.31,082.11,417.5-335.41,488.11,830.9-342.81,219.71,519.2-299.51,317.01,647.1-330.2
Of which:
Interest on public debt0.0291.1-291.10.0354.0-354.00.0393.2-393.20.0243.3-243.30.0286.3-286.3
ZLC6.157.5-51.46.3115.2-108.819.378.0-58.613.994.3-80.416.4111.6-95.2
Government n.i.e.19.334.6-15.220.334.7-14.420.839.5-18.721.345.0-23.721.646.5-24.9
Other services485.4118.1367.2494.0127.9366.1493.3137.8355.5463.6124.3339.3455.5128.5327.0
Of which: ZLC31.824.96.931.245.2-14.032.642.1-9.532.038.2-6.233.039.8-6.8
Unrequited transfers194.533.4161.1185.536.6148.9184.129.9154.2183.630.2153.4192.830.2162.6
Private transfers16.723.7-7.117.124.8-7.716.320.4-4.115.820.0-4.216.620.0-3.4
Official transfers177.89.7168.1168.511.8156.6167.89.5158.3167.810.2157.6176.210.2166.0
Capital account 2/3,178.83,502.4-323.63,749.84,181.9-432.01,345.01,169.5175.4698.9377.6321.34,215.94,040.2175.7
Official capital76.7272.2-195.538.3269.1-230.8155.0223.7-68.7186.4354.8-168.41,511.21,847.4-336.2
Grants42.00.042.00.00.00.00.00.00.00.00.00.070.60.070.6
Nonfinancial public sector34.7272.2-237.538.3269.1-230.899.7223.7-124.0186.4354.8-168.4-1,440.61,847.4-406.8
Medium and long term34.7259.1-224.438.3257.0-218.799.7211.1-111.4186.4342.0-155.61,426.91,847.4-420.5
Released collateral0.00.00.00.00.00.00.00.00.00.00.00.013.70.013.7
Venezuela oil loan0.012.7-12.70.011.7-11.70.012.6-12.60.012.4-12.40.00.00.0
Mexico oil loan0.00.4-0.40.00.4-0.40.00.00.00.00.4-0.40.00.00.0
(Official bank (other long term)0.00.00.00.00.00.055.30.055.30.00.00.00.00.00.0
(In millions of U.S. dollars)
Private capital3,102.13,230.2-128.13,711.53,912.8-201.21,190.0945.8244.1512.522.8489.72,704.72,192.8511.9
Direct investment140.861.879.0167.40.0167.4192.40.0192.4275.10.0275.1848.40.0848.4
Private borrowing41.040.20.832.030.91.244.826.018.757.20.057.21,645.10.01,645.1
Commercial banks foreign position2,920.33,128.2-207.93,512.13,881.9-369.8952.8919.833.0180.222.8157.4211.22,192.8-1,981.6
Errors and omissions237.6364.2-159.3210.8231.2
Overall balance-242.4-98.2-253.2399.8142.6
Financing357.2114.8242.4494.5396.498.2369.2116.0253.23,418.73,818.4-399.881.5224.1-142.6
Reserves14.0114.8-100.814.0147.3-133.212.9116.0-103.175.9295.3-219.545.8156.3111.0
Net foreign assets of the
National Bank of Panama0.0107.9-107.90.0146.1-146.10.077.1-77.10.0243.4-243.40.0130.2-130.2
Net use of Fund credit14.06.97.114.01.212.912.938.9-26.075.951.924.045.826.119.7
Rescheduling0.00.00.0480.50.0480.577.70.077.73,342.80.03,342.835.70.035.7
Arrears343.20.0343.20.0249.1-249.1278.60.0278.60.03,523.1-3,523.10.067.8-67.8
Memorandum items:
Colon Free Zone
Commodity trade4,776.94,060.7716.35,367.64,436.0931.75,357.24,689.5667.74,962.54,158.3804.25,870.64,919.3951.4
Services37.9507.3-469.437.5635.4-597.951.9595.1-543.145.9540.3-494.449.4633.8-584.3
Commodity trade without ZLC636.71,686.3-1,049.6672.41,852.7-1,180.3742.91,979.9-1,237.0761.42,076.2-1,314.8804.52,349.3-1,544.7
Services without ZLC1,324.4467.8856.61,433.1430.41,002.71,527.7496.01,031.71,537.5486.71,050.82,909.02,158.0751.0
Income and other services of:
General license banks570.4489.780.6752.7602.6150.1998.5857.1141.4807.1725.281.9894.3866.727.6
International license banks391.8406.1-14.3355.6324.231.4511.2469.142.0446.0411.734.3444.5436.67.9
Current account without ZLC3,103.03,506.2-403.23,373.23,737.3-364.13,942.84,336.7-393.93,702.24,112.3-410.13,906.44,537.6-631.3
Current account without
ZLC and banks2,140.92,610.4-469.62,264.92,810.5-545.62,433.23,010.5-577.32,449.12,975.4-526.32,567.63,234.3-666.7
Sources: Office of the Comptroller General; and Ministry of Planning and Economic Policy.

The data reflect the residence of enterprises based on the recommendations of the System of National Accounts 1993, and the Balance of Payments Manual, fifth edition, especially for the transactions of the enterprises operating in the Colon Free Zone (ZLC) and the international license banks.

Excluding errors and omissions.

Sources: Office of the Comptroller General; and Ministry of Planning and Economic Policy.

The data reflect the residence of enterprises based on the recommendations of the System of National Accounts 1993, and the Balance of Payments Manual, fifth edition, especially for the transactions of the enterprises operating in the Colon Free Zone (ZLC) and the international license banks.

Excluding errors and omissions.

External sector

22. The external current account deficit widened to 3 percent of GDP in 1997 from percent of GDP in 1996 (Table 32 and Figure 4). The trade deficit grew as imports associated with expanding investment were not fully offset by the growth in exports and ZLC net re-exports (Table 39). The services trade surplus fell in 1997 as growth in canal activity and tourism was insufficient to counter the increase in imported freight and insurance services connected with ZLC activity and the increase in external interest payments resulting from debt-reduction operations. The capital and financial account remained in surplus and the overall balance of payments declined to US$143 million in 1997, and net foreign assets of the BNP rose by US$130 million.

Table 32.Panama: Summary Balance of Payments(In millions of U.S. dollars, unless otherwise specified)
19931994199519961997
Current account balance-156.4-30.3-269.3-132.3-264.3
Trade balance-333.4-248.6-569.2-510.6-593.4
Exports636.7672.4742.9761.4804.5
Non-oil exports534.6565.0597.1594.0630.7
Petroleum exports102.1107.4145.8167.4173.8
Imports-1,686.3-1,852.7-1,979.9-2,076.2-2,349.3
Petroleum imports-266.0-299.1-303.5-394.9-371.9
Non-oil imports-1,420.3-1,553.6-1,676.4-1,681.3-1,977.4
Colon Free Zone, net716.3931.7667.7804.2951.4
Service balance15.969.3145.7224.9166.6
Freight and insurance-608.1-682.7-683.5-631.2-733.2
Of which: Colon Free Zone-424.9-475.1-475.0-407.8-482.4
Transportation540.1596.3652.3632.7690.9
Travel103.2139.4182.9207.3236.8
Investment income-371.3-335.4-342.8-299.5-330.1
Of which: public sector-291.1-354.0-393.2-243.3-286.2
Other services352.0351.7336.8315.6302.1
Transfers (net)161.1148.9154.2153.4162.6
Of which: Official transfers (net)168.1156.6158.3157.6166.0
Capital account balance-85.9-67.916.1532.1406.9
Public sector (net)-195.5-230.8-68.7-168.4-336.2
Grants42.00.00.00.070.6
Nonfinancial public sector-237.5-230.8-124.0-168.4-406.8
Drawings34.738.399.7186.41,440.6
Amortization-259.1-257.0-211.0-171.3-1,201.4
Other-13.1-12.1-12.6-183.5-646.0
National Bank of Panama0.00.055.30.00.0
Private capital 1/109.6162.984.7700.5743.1
Overall balance-242.4-98.2-253.2399.8142.6
Financing242.498.2253.2-399.8-142.6
Net foreign assets of the National Bank

of Panama (increase -)
-107.9-146.1-77.1-243.4-130.2
Net use of Fund credit7.112.9-26.024.019.7
Rescheduling0.0480.577.73,342.835.7
Arrears (net)343.2-249.1278.6-3,523.1-67.8
Memorandum item:
Current account (in percent of GDP)-2.2-0.4-3.4-1.6-3.0
Sources: Panamanian authorities; and Fund staff estimates.

Includes errors and omissions

Sources: Panamanian authorities; and Fund staff estimates.

Includes errors and omissions

Table 33.Panama: Composition of Merchandise Exports(In millions of U.S. dollars; unless otherwise specified)
19931994199519961997
Merchandise exports, f.o.b. 1/636.7672.4742.9761.4804.5
Petroleum102.1107.4145.8167.4173.8
Nonpetroleum exports, f.o.b. 2/506.8539.8577.2566.4658.0
Bananas
Value201.2206.6190.4184.0179.8
Volume (millions of boxes)38.241.138.134.833.5
Unit value per box5.35.05.05.35.4
Sugar
Value21.817.118.022.628.7
Volume (thousands of metric tons)62.854.844.246.662.4
Unit value per pound0.20.20.20.20.2
Shrimp
Value57.069.582.874.695.7
Volume (thousands of metric tons)7.67.910.411.012.6
Unit value per pound3.44.03.53.13.4
Coffee
Value11.614.033.418.822.4
Volume (thousands of metric tons)7.95.310.58.47.5
Unit value per pound0.71.21.41.01.4
Fishmeal
Value4.55.15.02.24.5
Volume (thousands of metric tons)15.719.120.57.111.1
Unit value per pound0.10.10.10.10.2
Other seafood
Value18.518.419.522.136.4
Volume (thousands of metric tons)6.36.25.47.213.4
Unit value per pound1.31.41.71.41.2
Clothing
Value21.420.522.220.124.1
Volume (metric tons)0.70.60.60.60.7
Unit value per pound32.634.436.233.534.4
Other exports
Value171.7188.6205.9222.0266.4
Balance of payments adjustments for cove-9.0-12.4-22.8-5.6-67.0
Re-exports35.937.642.733.239.7
Sources: Office of the Comptroller General; and Fund staff estimates.

Including re-exports and balance of payments adjustments.

Excluding re-exports and balance of payments adjustments.

Sources: Office of the Comptroller General; and Fund staff estimates.

Including re-exports and balance of payments adjustments.

Excluding re-exports and balance of payments adjustments.

Table 34.Panama: Petroleum Trade(In millions of U.S. dollars; volumes in millions of barrels; and unit values in U.S. dollars per barrel)
19931994199519961997
Net imports163.9191.7157.7227.5198.1
Total imports, f.o.b.266.0299.1303.5394.9371.9
Crude oil
Value182.1118.8135.0289.0262.2
From: Ecuador77.095.3116.695.8162.0
Venezuela20.714.918.4147.049.2
Mexico12.50.00.00.017.6
Other71.98.60.046.233.4
Volume12.48.58.814.715.0
Unit value14.714.015.420.517.5
Refined products83.9180.3168.5105.9109.7
Refinery64.2180.3168.5105.9109.7
Other19.70.00.00.00.0
Total exports, f.o.b.102.1107.4145.8167.4173.8
To other countries9.610.58.720.522.3
Bunker oil for ships76.263.081.7122.0120.9
Fuel for aircraft16.333.955.424.930.6
Sources: Office of the Comptroller General; and Ministry of Commerce and Industry.
Sources: Office of the Comptroller General; and Ministry of Commerce and Industry.
Table 35.Panama: Nontraditional Exports and Issue of Tax Credit Certificates(In millions of U.S. dollars)
19931994199519961997
Nontraditional exports, f.o.b. 1/77.882.2100.8129.5125.6
Food25.41.03.12.811.9
Other agricultural products17.023.835.446.251.3
Beverages and tobacco7.69.88.210.39.7
Metals0.30.00.00.00.0
Manufactures27.547.654.270.252.7
Issues of tax credit certificates12.312.613.819.118.8
Food4.20.10.30.32.2
Other agricultural products3.65.45.28.57.9
Beverages and tobacco1.22.31.01.51.5
Manufactures3.24.87.38.87.2
Ratio of tax credit certificates to nontraditional exports15.815.313.714.814.9
Source: Panama Trade Development Institute (IPCE)

Excludes nontraditional exports not benefitting from tax credit certificates.

Source: Panama Trade Development Institute (IPCE)

Excludes nontraditional exports not benefitting from tax credit certificates.

Table 36.Panama: Composition of Merchandise Imports, c.i.f.(Value in millions of U.S. dollars; indices: 1988 = 100)
19931994199519961997
Food
Value195.3211.9230.8267.0269.9
Volume index291.4315.4346.9385.1381.2
Unit value index72.172.171.474.876.3
Capital goods
Value514.5541.9582.7679.6762.9
Volume index352.4379.8373.0427.1488.8
Unit value index108.9106.6116.7119.2116.5
Petroleum
Value192.0125.5144.0301.7262.1
Volume index182.5126.1129.7216.7221.1
Unit value index122.2122.2136.9182.2155.6
Other consumer goods
Value1,293.41,522.81,553.21,531.51,697.4
Volume index233.6405.9386.9386.5423.3
Unit value index112.175.881.182.283.2
Total value2,195.22,402.12,510.72,779.82,992.3
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.
Table 37.Panama: Direction of Trade 1/(In percent)
19931994199519961997
Exports, f.o.b.100.0100.0100.0100.0100.0
Western Hemisphere55.461.066.372.872.9
United States34.337.841.947.446.2
Central America and the Caribbean17.919.219.619.320.8
South America2.12.73.74.13.9
Other1.11.37.43.15.0
Europe38.133.930.723.022.3
Belgium and Luxembourg5.57.04.84.25.3
Germany14.312.812.64.53.0
Italy5.51.81.11.00.7
Sweden9.79.04.810.28.3
Other3.13.37.43.15.0
Other countries5.43.81.92.23.6
Of which: exports through the
Colon Free Zone1.11.31.12.02.0
Imports, c.i.f. 2/100.0100.0100.0100.0100.0
Western Hemisphere60.060.963.765.764.0
United States36.938.039.437.436.9
Mexico2.82.03.33.84.9
Central America and the Caribbean9.39.17.67.17.2
Costa Rica2.82.82.92.72.9
Trinidad and Tobago0.80.70.40.30.7
Other5.75.64.34.13.5
South America11.011.813.417.415.0
Venezuela1.72.23.27.24.0
Ecuador3.84.45.33.75.6
Brazil1.51.71.41.11.0
Other4.03.53.55.44.4
Europe9.09.68.88.38.6
Germany1.91.81.91.71.3
France0.80.60.60.51.5
Spain1.01.01.21.01.3
Italy0.81.40.90.80.7
Netherlands0.41.81.30.90.6
United Kingdom0.70.60.60.60.9
Other3.42.42.32.82.3
Othër countries31.029.527.526.027.4
Of which: imports from the
Colon Free Zone16.515.314.313.613.3
Source: Office of the Comptroller General.

Based on Customs data.

Excludes sales of bunker oil.

Source: Office of the Comptroller General.

Based on Customs data.

Excludes sales of bunker oil.

Table 38.Panama: Net Services Receipts(In millions of U.S. dollars)
19931994199519961997
Total service receipts (net)15.969.3145.7224.9166.6
Investment income-371.3-335.4-342.8-299.5-330.1
Of which:
Interest on the public debt-291.1-354.0-393.2-243.3-286.2
Colon Free Zone-51.4-108.8-58.6-80.4-95.1
Freight and insurance-608.1-682.7-683.5-631.2-733.2
Transshipment of oil25.323.522.010.922.3
Colon Fr