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Panama: Selected Issues and Statistical Appendix

Author(s):
International Monetary Fund
Published Date:
January 2006
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VI. Fiscal Cost of a Free Trade Agreement with the United States48

A. Introduction

112. Free trade agreements are part of Panama’s strategy to boost its export-oriented sector. Trade agreements may provide Panama with numerous benefits: they may encourage foreign investors with a regional focus to establish their operations in Panama, enhance the legal framework to attract U.S. investors, and expand access to the U.S. market. Free trade agreements with El Salvador and with Taiwan Province of China were concluded in 2003, and the authorities have held several rounds of negotiations since April 2004 on a free trade agreement with the United States, Panama’s most important trading partner. Implementation of such an agreement could have a significant adverse effect on import tax revenues, however.

113. This chapter presents estimates of the fiscal cost of a prospective free trade agreement between Panama and the United States. The direct effect of removing tariffs on imports from the United States is estimated to be on the order of ½ percent of GDP, phased over several years. On the basis of an assumed timetable for tariff reductions, more than half of the impact would arise during the first five years after the agreement takes effect. If, as a result of the removal of tariffs, imports from third countries are displaced by imports from the United States, the total loss of tax revenue might range as high as 1 percent of GDP. However, these estimates do not incorporate the potential dynamic effects of higher growth that might, over time, result from the FTA. In view of the authorities’ fiscal policy objectives, which include revenue mobilization, the implementation of a trade agreement with the United States would likely give rise to a need for compensating fiscal revenue measures. The range of estimates of foreign tax revenue presented here suggest the potential size of the revenue gap that may be created by the FTA.

114. The chapter is organized as follows: Section B presents background information; Section C discusses methodology and data; Section D presents estimates of the revenue loss; and Section E concludes.

B. Tariff Revenue in Panama

115. Although tariffs have declined since the beginning of the 1990s, they continue to account for a significant portion of total revenue. Over the last decade, customs duties accounted for 11 percent of government revenue on average. Even though tariff revenues have been an important source of revenue, their share of total tax revenue has declined since 1998. In the period 1992–99, customs duties accounted for 13 percent of total revenues, or about 2.1 percent of GDP, while during the period 2000–03, these ratios declined to 17.5 percent and 1.6 percent of GDP, respectively.

116. Tax revenue from trade with the United States is an important source of Panama’s fiscal revenue. The United States is Panama’s main supplier of imports with 35 percent of the total, followed by the Colon Free Zone (a tax-free distribution center located in Panama) with 19 percent. Also, trade with the United States accounts for 39 percent of total import tariffs, or 7 percent of total tax revenues. Hence, removing tariffs has the potential to significantly reduce tax collections.

Table. Country Origin of Imports and Import Tariff Revenue 1/
Origin of ImportsShare of Total ImportsShare of Total Import Tariff RevenuesRatio of Import Tariffs to Total Tax Revenue
(in percent)
United States35.439.27.4
Colon Free Zone18.814.92.8
Japan9.411.22.1
Mexico4.34.75.6
Other countries32.230.00.0
Source: Ministry of Economy and Finance, and Fund staff estimates.

Estimates based on data for 2003.

Source: Ministry of Economy and Finance, and Fund staff estimates.

Estimates based on data for 2003.

C. Methodology and Data

117. A free trade agreement with the United States could affect tax revenue in several ways. The direct effect, which arises at unchanged import volumes and (pre-tariff) prices, consists of the loss of tariffs on imports from the United States, plus a small additional impact on VAT revenue (ITBMS in Panama), which is levied on the tariff-inclusive price of imports. Indirect effects result from changes in import volumes, prices, and country of origin; they could include some or all of the following:

  • An increase in import demand may result from the tariff cuts (trade creation), with a positive effect on import taxes. However, if the authorities respond to the initial loss of tariff revenues with compensating increases in other indirect taxes, the extent of trade creation would likely be diminished.
  • Over the medium term, the FTA is expected to raise economic growth, particularly in the production of merchandise and service exports. While this effect may be important, estimation of the magnitude and timing of the impact on tax revenues lies beyond the scope of this paper.
  • Trade diversion, in which duty-free imports from the United States displace dutiable imports from third countries, may occur to the extent that there is substitutability between goods. In an extreme case of nearly perfect substitution, the U.S. share of Panama’s imports would rise sharply.49 The likely extent of trade diversion cannot be estimated ex ante; to illustrate the potential impact of this indirect effect, alternative assumptions will be made.
  • Third-country exporters may seek to maintain their market share by cutting their pre-tariff price enough to prevent trade diversion. This effect, which assumes a high degree of substitution but imperfect competition, would result in a smaller tax revenue loss than would occur with trade diversion.

118. The estimation of the direct fiscal cost assumes the full elimination of tariffs from imports coming from the United States, with no change in import volumes or the sourcing of imports. The fiscal cost is the result of adding all collected tariffs from imports arriving from the United States. The resulting estimation of revenue loss will be understated by as much as 5 percent, because it does not include the impact that tariff reductions have on the VAT base, hence on VAT revenue.50

119. Since the FTA negotiations with the United States have not been concluded, some assumptions need to be made concerning the schedule of tariff reductions. As a benchmark, this chapter draws upon the results of the free trade agreement signed between the United States and Central American countries (CAFTA). The CAFTA contains a common schedule for specified groups of goods that applies to imports from the United States by all Central American countries, and a set of country-specific schedules for other goods. Specifically, it is assumed that the timetable for tariff elimination in Panama parallels the negotiated common schedule in CAFTA, reflecting the view that there are important similarities between the structure of CAFTA and the Panama-U.S. FTA currently being negotiated.

120. Under the assumed schedule for removing tariffs on imports from the United States, the longer phase-out periods are associated with the highest import tariff rates (Table 1). In many cases, negotiators may seek to delay the elimination of tariffs on those goods considered sensitive for the country, and these sensitive goods may be protected with higher than average tariffs. Hence, it is expected that tariffs would be removed more slowly for goods with higher pre-agreement tariffs.

Table 1Assumed Timetable for Tariff Removal
Number of Years After Free Trade Agreement Takes Effect
1234567891011121314151617181920
Initial tariff rate (in percent)(Percentage reduction of initial tariff rate)
Less than 10100100100100100100100100100100100100100100100100100100100100
10–14.920406080100100100100100100100100100100100100100100100100
15–19.9102030405060708090100100100100100100100100100100100
10–59.9713202733404753606773808793100100100100100100
20–99.9000000817253346607387100100100100100100
Over 1000000000000102030405060708090100
Source: Fund staff estimates.
Source: Fund staff estimates.

121. Data were provided by the Contraloria General and the Ministry of Economy and Finance. The Contraloria General provided information for each (8-digit) tariff line on the origin of imports, value of imports, collected taxes, taxable status (exemption, tax free under special trade treaty, and taxable). Additionally, the Ministry of Economy and Finance provided information on tariff rates by tariff line.

D. Estimate of Revenue Loss

122. The direct fiscal cost of the free trade agreement between Panama and the United States is estimated at 0.6 percent of GDP, or around US$83 million, in 2003 prices. This fiscal cost is estimated assuming that all tariffs on imports from the United States are removed, and import volumes remain unchanged. However, this revenue loss would be spread out over time, depending on the timetable for removing tariffs.

123. Under the assumed schedule for tariff removal, the direct fiscal impact of the FTA would be a revenue loss of 0.2 percent of GDP, or US$22 million in 2003 prices, during the first year after the agreement enters into effect (Figure 1). About half of the revenue loss would be realized by the fourth year, and most of the full effect (more than 85 percent) would be realized by the tenth year of the FTA. Nevertheless, this pattern could be affected significantly to the extent that additional revenue losses are caused by trade diversion.

Figure 1Share of Import Tariffs

Figure 2Tax Revenue Loss

(In percent of GDP) 1/

1/ In prices of 2003

Next, two simulations of trade diversion are presented to illustrate its potential consequence for fiscal revenue. The simulations assume trade diversion of 15 percent and 50 percent of import goods, respectively, corresponding to the percentage of imports from non-U.S. suppliers that are replaced by U.S. imports.51 While the probable extent of trade diversion is not known, it may be observed that the U.S. share of Mexico’s imports after one decade of NAFTA has actually decreased.52 This is only suggestive of there not being a large degree of trade diversion. For example, Fukao, Okubo and Stern (2003)53 found evidence of trade diversion for U.S. imports of textiles, apparel, and some footwear products at a 4-digit level of the harmonized system. Since the extent of trade diversion following a FTA with the United States would differ from one country case to another, the simulations presented below are best viewed as highlighting the sensitivity of the results to the assumed degree of trade diversion. Since the extent of trade diversion following a FTA with the United States would differ from one country case to another, the simulations presented below are best viewed as highlighting the sensitivity of the results to the assumed degree of trade diversion.

124. Trade diversion of 15 percent of imports would lower tax revenue by an additional 0.1 percent of GDP. Figure 3 shows both the benchmark case and the cost of incorporating trade diversion of 15 percent of imports. This scenario assumes trade diversion of 3 percent of imports in the first year of the agreement, and continues increasing in the following year until a plateau of 15 percent of imports is reached in the fourth year.

Figure 3Tax Revenue Loss with Trade Diversion of 15 Percent of Imports

(In percent of GDP)

125. On the other hand, the fiscal cost of the FTA, assuming a trade diversion of 50 percent, could reach just over 1 percent of GDP. This exercise assumes a phased switching of imports until trade diversion reaches 50 percent in the 15th year. Figures 3 and 4 suggest that estimates of foregone tax revenue strongly depend on the degree of import substitution from non-U.S. suppliers to U.S. suppliers. Also, if trade diversion were as high as assumed in the high-case simulation, the estimated revenue loss would be nearly twice as large as the direct effect alone.

Figure 4Tax Revenue Loss with trade diversion of 50 Percent of Imports

(In percent of GDP)

E. Conclusion

126. The free trade agreement between Panama and the United States could reduce Panama’s tax revenues by more than ½ percent of GDP, and could exceed 1 percent of GDP under a strong assumption about the degree of trade diversion (50 percent). The lower bound of the revenue loss reflects the static effect of assuming unchanged volumes and prices of imports, both from the United States and from third countries. Estimates of the direct and indirect effects are sensitive to the assumptions made concerning the extent and timing of trade diversion. Nevertheless, the fiscal cost would depend on the speed of removing tariffs. The estimation mentioned above considers the full effect of removing tariffs, but it is expected that the elimination of tariffs would be gradual to allow the economy a smooth transition to the free trade agreement.

Table 2.Distribution of Customs Duties by Tariff Rate, all Countries 1/
Statutory Tariff Rate (in percent)As percentage of totalEffective Tariff 2/ (in percent)Tax Revenue (US$ million)
ImportsTax Revenue
038.00.00.00.0
0.61.50.10.60.3
11.80.31.20.7
20.40.11.90.2
2.50.00.02.50.0
36.02.73.05.6
40.00.03.70.0
514.410.64.922.5
5.10.10.04.90.1
60.60.65.71.2
70.40.58.81.2
7.50.00.07.60.0
80.70.98.52.0
90.00.09.10.0
1014.221.09.144.4
120.00.05.80.0
12.50.00.012.50.0
1516.837.113.178.6
182.15.517.811.6
201.13.119.36.6
250.00.118.00.2
300.31.215.42.5
500.00.213.40.4
540.00.018.80.1
581.211.764.024.7
630.10.823.61.6
650.21.565.03.1
660.00.019.60.1
730.00.465.30.8
740.00.234.60.5
760.00.128.70.2
810.00.180.90.3
830.00.219.20.4
1030.11.0110.02.0
1470.00.0149.10.0
1590.00.166.60.2
2730.00.0281.50.0
Total100.0100.0212.0
Sources: Comptroller General; Ministry of Economy and Finance; and Fund staff estimates.

Information refers to imports and import duties in 2003.

The effective tariff is the ratio of tariff revenues (shown in the final column) to imports in 2003 at each tariff rate.

Sources: Comptroller General; Ministry of Economy and Finance; and Fund staff estimates.

Information refers to imports and import duties in 2003.

The effective tariff is the ratio of tariff revenues (shown in the final column) to imports in 2003 at each tariff rate.

Table 3.Distribution of Customs Duties by Tariff Rate Based on Imports from the United States 1/
Statutory Tariff Rate (in percent)As percentage of totalEffective Tariff (in percent)Tax Revenue (US$ million)
ImportsTax Revenue
032.80.00.00.0
0.60.20.00.40.0
10.40.11.70.1
20.40.12.00.1
2.50.00.02.50.0
39.23.53.02.9
520.213.05.010.8
5.10.00.05.10.0
60.80.66.20.5
70.40.49.40.4
80.40.48.90.4
90.00.09.30.0
1013.916.79.313.9
12.50.00.012.40.0
1514.825.113.120.8
180.92.017.71.6
200.92.319.11.9
250.10.317.70.2
300.61.926.61.6
500.00.250.00.2
540.00.045.10.0
583.629.764.024.7
630.00.237.10.1
730.00.374.00.3
740.10.326.20.3
760.00.122.40.1
810.00.080.40.0
830.20.210.00.2
1030.22.4110.02.0
1470.00.0149.10.0
1590.00.0161.10.0
2730.00.0281.50.0
Total100.0100.083.1
Sources: Comptroller General; Ministry of Economy and Finance; and Fund staff estimates.

Information refers to imports and import duties in 2003.

Sources: Comptroller General; Ministry of Economy and Finance; and Fund staff estimates.

Information refers to imports and import duties in 2003.

STATISTICAL APPENDIX
Table 1.Panama: National Accounts by Productive Activity
19992000200120022003
(In millions of balboas at 1996 prices)
Gross domestic product at market prices11,07011,37111,43611,69112,196
Primary activity8158779259671,030
Agriculture727798849877918
Mining88797690112
Secondary activity1,7101,6321,4461,3891,500
Manufacturing1,1801,0951,026999983
Construction530537420390517
Services8,1548,6018,7488,8669,177
Public utilities343375357382388
Commerce, restaurants, and hotels1,8231,8931,9631,9461,964
Colon Free Zone wholesale694805894817792
Restaurants and hotels236235259277308
Other893854810851864
Transport and communications1,5321,7241,7681,8032,048
Panama Canal Authority521533549554604
Other transport and comm.1,0111,1911,2191,2491,444
Financial intermediation1,0241,1231,0901,012950
Housing1,7151,7771,7941,8681,936
Public administration1,0481,0671,1291,1711,201
Other services670643648685691
Plus: import taxes264221209212212
Plus: other taxes minus subsidies502457477546584
Less: imputed banking services374416369288307
(Percent change)
Gross domestic product at 1996 market prices3.92.70.62.24.3
Primary activity3.17.65.54.66.5
Agriculture1.09.86.53.34.6
Mining23.9-10.6-4.118.725.2
Secondary activity9.8-4.5-11.4-3.98.0
Manufacturing1.1-7.2-6.3-2.6-1.6
Construction36.01.3-21.8-7.132.5
Services3.45.51.71.33.5
Public utilities12.09.3-4.76.91.7
Commerce, restaurants, and hotels-3.93.83.7-0.90.9
Colon Free Zone wholesale-13.616.011.1-8.6-3.1
Restaurants and hotels10.7-0.810.57.010.9
Other1.3-4.4-5.25.11.6
Transport and communications6.712.52.52.013.6
Panama Canal Authority1.42.33.10.99.0
Other transport and communications9.617.82.32.515.6
Financial intermediation5.39.7-2.9-7.2-6.2
(In millions of balboas at 1996 prices)
Housing6.13.61.04.13.7
Public administration0.81.85.83.82.6
Other services8.6-4.00.75.80.9
Plus: import taxes-3.0-16.2-5.41.20.2
Plus: other taxes minus subsidies8.8-8.94.314.56.9
Less: imputed banking services19.511.4-11.4-21.96.5
(Percent distribution)
Gross domestic product at 1996 market prices100.0100.0100.0100.0100.0
Primary activity7.47.78.18.38.4
Agriculture6.67.07.47.57.5
Mining0.80.70.70.80.9
Secondary activity15.414.412.611.912.3
Manufacturing10.79.69.08.58.1
Construction4.84.73.73.34.2
Services73.775.676.575.875.2
Public utilities3.13.33.13.33.2
Commerce, restaurants, and hotels16.516.617.216.616.1
Colon Free Zone wholesale6.37.17.87.06.5
Restaurants and hotels2.12.12.32.42.5
Other8.17.57.17.37.1
Transport and communications13.815.215.515.416.8
Panama Canal Authority4.74.74.84.74.9
Other transport and communications9.110.510.710.711.8
Financial intermediation9.39.99.58.77.8
Housing15.515.615.716.015.9
Public administration9.59.49.910.09.9
Other services6.05.75.75.95.7
Plus: import taxes2.41.91.81.81.7
Plus: other taxes minus subsidies4.54.04.24.74.8
Less: imputed banking services3.43.73.22.52.5
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.
Table 2.Panama: National Accounts by Expenditure
19992000200120022003
(In millions of balboas at current prices)
Consumption8,9379,0469,31610,1199,930
Public consumption1,2741,2641,3531,3721,455
Private consumption7,6637,7827,9638,7478,475
Gross domestic investment3,1582,8632,2892,2122,762
Public509456479530663
Private 1/2,6492,4071,8101,6822,099
Total domestic demand12,09511,91011,60512,33012,692
Exports of goods and services3,2793,5573,6133,5693,861
Imports of goods and services3,9183,8463,4103,6273,690
Foreign balance-639-289203-58171
Gross domestic product at current prices11,45611,62111,80812,27212,862
(In percent of GDP)
Consumption78.077.878.982.477.2
Public consumption11.110.911.511.211.3
Private consumption66.967.067.471.365.9
Gross domestic investment27.624.619.418.021.5
Public4.43.94.14.35.2
Private 1/23.120.715.313.716.3
Total domestic demand105.6102.598.3100.598.7
Exports of goods and services28.630.630.629.130.0
Imports of goods and services34.233.128.929.628.7
Foreign balance-5.6-2.51.7-0.51.3
Gross domestic product at current market prices100.0100.0100.0100.0100.0
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
19992000200120022003
(In millions of balboas)
Gross domestic investment3,1582,8632,2892,2122,762
Fixed capital formation2,7562,5411,9921,9362,505
Public sector509456479530663
Private sector2,2472,0841,5131,4061,842
Change in inventories402323297276257
Gross national saving1,9992,1742,1152,1512,354
Public saving298454202164131
Private saving1,7011,7211,9141,9862,224
Foreign saving1,15968917461408
(In percent of GDP)
Gross domestic investment27.624.619.418.021.5
Fixed capital formation24.121.916.915.819.5
Public sector4.43.94.14.35.2
Private sector19.617.912.811.514.3
Change in inventories3.52.82.52.22.0
Gross national saving17.418.717.917.518.3
Public saving2.63.91.71.31.0
Private saving14.914.816.216.217.3
Foreign saving10.15.91.50.53.2
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.
Table 4.Panama: Electricity Generation and Consumption

(In thousands of gigawatt hours) 1/

20002001200220032004 2/
Net generation4.674.865.005.285.47
Hydro3.402.553.282.893.90
Thermal1.272.311.722.391.58
Total consumption3.854.044.044.244.49
Residential1.121.261.261.341.44
Commercial1.571.731.731.952.06
Industrial0.500.370.370.250.24
Government0.590.660.660.690.74
Other0.070.020.020.010.01
Sources: ETESA (Empresa de Transmisión Eléctrica, SA), Elektra, Nordeste, and Unión Fenosa.

A gigawatt hour is equal to one billion watts being generated or consumed for one ho

Preliminary.

Sources: ETESA (Empresa de Transmisión Eléctrica, SA), Elektra, Nordeste, and Unión Fenosa.

A gigawatt hour is equal to one billion watts being generated or consumed for one ho

Preliminary.

Table 5.Panama: Private Sector Construction Permits(In thousands of U.S. dollars)
TotalPanamáSan MiguelitoColónOthers
1999461,544302,25882,44728,56148,278
2000509,251363,66672,27829,00444,303
2001397,385293,15444,18423,78036,267
2002372,123233,78963,66135,29339,380
2003883,420707,56168,63746,07661,146
2004 1/463,024355,68543,25216,75212,771
Source: Office of the Comptroller General.

Preliminary data.

Source: Office of the Comptroller General.

Preliminary data.

Table 6.Panama: Premium and Regular Gasoline Sales in Stations(In thousands of barrels)
Month20002001200220032004
January271264271258270
February257240248250245
March279271285255295
April257263261267281
May266250274267251
June266259251254260
July253260272271273
August269271270269271
September0237262261265
October265252277287258
November250271253262
December279291289294
Total2,9123,1293,2123,1962,668
Sources: Ministry of Commerce and Industry; and Fund staff estimates.
Sources: Ministry of Commerce and Industry; and Fund staff estimates.
Table 7.Panama: Diesel Sales in Stations(In thousands of barrels)
Month20002001200220032004
January214210211216239
February208195204218220
March234236239221266
April216219224231264
May227218237235221
June213214206224231
July218203226233246
August225223224228235
September0199214220239
October214209224247228
November209217214226
December208214228237
Total2,3862,5552,6512,7362,390
Sources: Ministry of Commerce and Industry; and Fund staff estimates.
Sources: Ministry of Commerce and Industry; and Fund staff estimates.
Table 8.Panama: Monthly Index of Economic Activity(Base Year 1997=100)
Percent Change
OriginalTrendOriginalTrend
(Period average)
2000112.8112.92.42.6
2001109.5109.3-2.9-3.2
2002109.8109.50.30.2
2003114.5113.74.23.8
2004121.1121.05.86.4
(End of period)
2000108.6111.3-3.60.1
2001105.8109.0-2.6-2.0
2002108.9109.32.90.2
2003118.5117.38.97.3
2004129.9124.89.66.5
Sources: Office of the Comptroller General (Contraloria); and Fund staff estimates.
Sources: Office of the Comptroller General (Contraloria); and Fund staff estimates.
Table 9.Panama: Canal Statistics
Traffic Assessed Toll on Net Tonnage Basis 1/
Total TrafficAverage Tonnage per Transit (In thousands of p.c. net tons)
Fiscal year Ended Sep. 30Number of Transits (In thousands)Tolls (In millions of balboas)Cargo Tonnage (In millions of long tons)Average Toll (balboas per long ton)Number of Transits (In thousands)Net Tonnage 2/ (In millions of p.c. net tons)
Total traffic
199914.3568.9196.02.914.1227.616.2
200013.7574.2193.73.013.5229.917.1
200113.5579.5193.23.013.3231.217.4
200213.2588.8187.83.113.1234.917.9
200313.1665.9188.33.513.0242.518.7
200414.0757.713.9266.719.2
Of which Commercial ocean traffic 3/
199913.1568.1196.02.913.0227.417.5
200012.3573.0193.73.013.7229.516.8
200112.2578.4193.13.012.1230.719.1
200211.9587.6187.83.111.8234.519.9
200311.7664.6188.33.511.6242.020.9
200412.5756.212.4266.121.5
Sources: Panama Canal Authority; and Fund staff estimates.

Traffic tolls not assessed on net tonnage basis are assessed on displacement-tonnage basis.

One Panama Canal (p.c) net ton equals 100 cubic feet space. Noncommercial ocean traffic is mainly U.S. government traffic.

Ocean traffic includes ships of 300 p.c. net tons and over.

Sources: Panama Canal Authority; and Fund staff estimates.

Traffic tolls not assessed on net tonnage basis are assessed on displacement-tonnage basis.

One Panama Canal (p.c) net ton equals 100 cubic feet space. Noncommercial ocean traffic is mainly U.S. government traffic.

Ocean traffic includes ships of 300 p.c. net tons and over.

Table 10.Panama: Labor Force Statistics
19992000200120022003 1/
(In thousands of persons)
Total population2,811.92,948.03,004.03,058.03,113.0
Working age population1,779.11,814.81,907.21,949.71,984.8
Total labor force 2/1,089.41,086.61,154.01,285.01,315.3
Employment by activity961.4942.0984.21,111.71,146.6
Agriculture and mining168.4163.0210.0236.3240.6
Manufacturing94.085.386.0100.2103.6
Public utilities7.06.99.38.69.3
Construction73.069.263.971.979.7
Commerce182.7181.0170.8195.6199.8
Banking23.927.320.622.521.3
Transportation and communication73.071.773.281.986.0
Other services339.4337.6323.9394.6406.3
Unemployment128.0144.6169.7173.3168.8
Unemployment rate11.813.314.713.512.8
Memorandum items:
Employment by sector961.4942.0984.21,111.71,146.6
Public sector156.1171.6177.7181.0182.0
Private business424.1401.6421.3443.3443.3
Self-employed296.1291.3296.0333.2333.2
Other85.077.589.2154.2188.1
(Annual percent change)
Total population1.74.81.91.81.8
Working age population2.12.05.12.21.8
Total labor force0.5-0.36.211.42.4
Employed2.7-2.04.512.93.1
Unemployed-13.012.917.42.1-2.6
Labor force participation rate 3/61.259.960.565.966.3
Employment rate 4/54.051.951.657.057.8
Unemployment rate11.813.314.713.512.8
Of which: Metropolitan areas 5/13.815.217.016.116.1
Sources: Ministry of Labor; and Office of the Comptroller General.

As of August 2003 household survey.

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 a percentage of the working-age population.

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

Includes the cities of Panama and Colon.

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

As of August 2003 household survey.

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 a percentage of the working-age population.

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

Includes the cities of Panama and Colon.

Table 11.Panama: Wholesale Price Index(12-month percentage change)
TotalImportsIndustrialAgricultural
(In percent)
Weights100.043.745.111.2
(Period average)
19992.76.0-0.30.8
20008.713.16.20.6
2001-3.2-5.1-1.90.5
2002-3.0-4.5-1.8-0.8
20031.71.62.9-2.8
2004 1/4.55.34.12.6
(End of period)
1999
March-2.1-2.6-2.30.7
June0.44.1-3.40.8
September5.610.51.90.9
December6.812.22.90.9
2000
March10.917.07.7-0.6
June10.313.88.51.5
September6.910.93.81.3
December7.210.94.70.3
2001
March1.72.80.41.1
June-1.3-2.5-0.40.9
September-3.5-6.1-1.30.4
December-9.4-13.9-6.3-0.3
2002
March-7.8-11.3-6.12.4
June-3.3-3.9-3.4-0.3
September-2.7-4.0-1.3-3.0
December2.21.73.8-2.2
2003
March4.85.76.2-5.0
June-0.9-2.62.2-5.3
September1.91.63.0-1.2
December1.01.90.30.4
2004
March2.13.01.12.6
June7.08.36.33.7
September5.05.64.73.2
Source: Office of the Comptroller General; and Fund staff estimates.

Year through September.

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

Year through September.

Table 12.Panama: Consumer Price Index 1/(Index 1987=100, unless otherwise noted)
TotalFoodClothingHousing 2/TransportOther
(Period average)
2000114.0113.6108.9117.4110.1115.2
2001114.3112.8113.5119.8106.6116.8
2002115.5112.1113.1121.3113.7117.0
2003117.1113.5114.5124.3114.5118.4
2003 3/100.599.7102.0101.799.8100.3
2004 (January – June) 3/100.5100.199.7101.3101.0100.3
(Monthly index)
2000 - December114.1113.4109.8119.6107.0115.7
2001 - December114.1112.8113.6120.2103.8117.3
2002
March115.3112.0113.1120.9112.5117.4
June115.2111.1113.3121.3113.6117.3
September115.7112.7112.9121.2114.7116.5
December116.1112.3114.0122.2115.5117.2
December 3/100.0100.0100.499.9100.199.8
2003
March117.1112.3114.9129.0116.1122.6
June116.9113.3114.8130.6116.3122.8
September117.3114.0114.6129.8116.8122.5
December118.1115.0113.0131.4116.5122.6
2003 3/
March100.799.2103.0102.2101.1100.3
June100.599.7101.7102.399.1100.4
September100.4100.0101.2101.1100.3100.1
December100.1100.0100.2100.899.899.8
2004 3/
March100.399.799.7101.3100.6100.4
June100.9100.699.3101.6102.4100.5
(Annual percent change)
20010.3-0.64.22.0-3.21.4
20021.0-0.7-0.41.36.70.1
20031.41.31.22.40.61.2
2004 (January – June) 3/0.00.4-2.2-0.51.20.0
(12-month percent change)
2001 - December0.0-0.53.50.5-3.01.4
2002 - December1.8-0.40.41.611.3-0.1
2003
March1.60.31.66.73.24.4
June1.52.01.37.72.44.7
September1.41.21.57.11.85.2
December1.72.4-0.97.60.94.7
December 3/0.10.0-0.20.8-0.30.0
2004 3/
March-0.40.5-3.2-0.9-0.50.1
June0.40.9-2.4-0.63.30.2
Memorandum items:
Weights CPI 1987=100100.034.95.121.015.123.9
Weights CPI October 2002=100100.032.39.720.213.024.8
Source: Office of the Comptroller General.

The new CPI with October 2002 as reference period is a national index, whereas the 1987-base CPI refers only to Panama City. The new CPI was released in October 2004 and its weights are based on the 1997/98 household survey.

Includes rent, furniture, maintenance work, and utilities (water, electricity, and domestic gas).

Based on revised CPI (October 2002=100).

Source: Office of the Comptroller General.

The new CPI with October 2002 as reference period is a national index, whereas the 1987-base CPI refers only to Panama City. The new CPI was released in October 2004 and its weights are based on the 1997/98 household survey.

Includes rent, furniture, maintenance work, and utilities (water, electricity, and domestic gas).

Based on revised CPI (October 2002=100).

Table 13.Panama: Operations of the Nonfinancial Public Sector
Jan.–Sept.
200020012002200320032004
(In millions of balboas)
Revenue and grants3,110.72,980.23,006.03,140.42,072.82,291.1
General government current revenue2,821.32,654.82,714.42,720.71,815.11,895.7
Central government1,999.21,836.81,901.11,917.41,237.41,255.5
Social security agency741.9733.9724.5725.0518.7580.7
Decentralized agencies80.284.088.978.459.059.5
Public enterprise operating balance (deficit -)307.4269.4300.1346.5211.2364.3
Overall balance of nonconsolidated public sector (deficit -)-68.7-2.4-30.621.621.221.9
Educational insurance balance (deficit -)-16.2-2.4-5.92.714.43.8
Capital revenue63.160.328.048.810.95.4
Grants3.80.60.00.00.00.0
Expenditure3,050.33,197.53,343.33,624.02,715.92,827.6
General government current expenditure2,593.92,718.42,813.72,961.02,297.92,365.0
Central government1,541.11,594.51,610.31,709.81,372.71,403.7
Social security agency905.5982.51,055.21,104.9816.6854.2
Decentralized agencies147.4141.4148.2146.2108.5107.1
Capital456.4479.1529.6663.0418.0462.7
Fixed investment528.1528.1528.1528.1528.1528.1
Transfers to private sector55.255.255.255.255.255.2
Saving 1/449.9201.0164.3130.6-236.0-79.3
Overall balance (deficit -)60.4-217.2-337.3-483.6-643.1-536.5
Financing-60.4217.2337.3483.6643.1536.5
External109.9365.7328.5287.4292.6145.3
Disbursements510.11,245.81,079.5421.0386.2662.9
Repayments391.3535.7946.2287.9278.0536.4
Change in deposits abroad8.9344.4-195.2-154.3-184.4-18.8
Domestic (net)-171.4-148.98.9196.3350.6391.2
Trust Fund for Development-28.8115.60.05.00.039.2
Panama Canal Authority-130.9-57.5-66.0-126.9-145.7-210.0
Other-11.7-207.074.9318.2496.3562.0
Of which: banking system-35.1113.4213.1225.0368.0351.3
Privatization1.10.40.00.00.00.0
(Percent change)
Revenue11.1-4.10.93.87.310.5
Expenditure3.74.84.68.49.44.1
Current6.74.83.55.27.62.9
Capital-10.35.010.625.220.710.7
(In percent of GDP)
Revenue and grants26.825.224.524.421.522.1
Expenditure26.227.127.228.228.227.3
Current22.323.022.923.023.822.9
Capital3.94.14.35.24.34.5
Saving 1/3.91.71.31.0-2.4-0.8
Overall balance (deficit-)0.5-1.8-2.7-3.8-6.7-5.2
Financing-0.51.82.73.86.75.2
External0.93.12.72.23.01.4
Domestic-1.5-1.30.11.53.63.8
Trust Fund for Development-0.21.00.00.00.00.4
Panama Canal Authority-1.1-0.5-0.5-1.0-1.5-2.0
Other-0.1-1.80.62.55.15.4
Of which: banking system-0.31.01.71.83.83.4
(In millions of balboas)
Memorandum items:
External interest obligations366.3414.4448.5471.59413.3424.1
GDP (market prices)11,62111,80812,27212,8629,64710,345
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

Current revenue less current expenditure.

Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

Current revenue less current expenditure.

Table 14.Panama: Central Government Operations
Jan.–Sept.
200020012002200320032004
(In millions of balboas)
Revenue and grants2,113.51,951.71,978.52,014.11,279.71,298.2
Current revenue2,108.51,919.21,977.01,978.21,281.71,298.2
Tax revenue1,120.11,038.51,050.71,127.3816.1862.7
Income tax494.2453.8451.7435.2319.9333.1
Wealth tax52.760.956.184.059.461.5
Taxes on foreign trade201.9172.4184.2200.1137.5148.7
Taxes on domestic transactions371.3351.4358.7407.9299.2319.4
Nontax revenue988.4880.7926.3850.9465.6435.6
Panama Canal142.4141.1152.1144.6109.3104.9
Transfers from the rest of public sector340.5251.9211.7206.6145.2140.6
Other505.6487.7562.5499.6211.2189.6
Capital revenue1.232.01.535.9-2.00.0
Grants3.80.60.00.00.00.0
Expenditure2,242.12,291.52,305.02,487.42,004.92,030.9
Current1,964.91,974.01,972.62,081.01,686.21,685.5
Wages and salaries641.7673.6695.5728.3534.0561.4
Goods and services178.3172.3146.9179.2140.9134.9
Pensions and transfers615.6562.4567.8560.2479.4445.7
Of which:
Social security agency346.4297.7280.4281.8245.7211.7
Decentralized agencies85.092.991.892.771.774.5
Public enterprises2.03.02.11.61.40.0
Interest484.6500.1508.1559.4490.0501.0
Domestic121.593.766.289.878.278.2
External363.1406.4441.9469.6411.7422.8
Other current expenditure44.765.554.353.941.942.4
Capital277.2317.5332.3406.4318.7345.4
Fixed capital formation223.4242.4283.9332.3259.5265.6
Transfers of capital53.875.148.574.159.179.7
To public enterprises5.117.910.35.82.048.4
Saving 1/147.4-54.34.4-102.8-404.5-387.3
Overall balance (deficit-)-128.6-339.8-326.5-473.3-725.2-732.6
(In millions of balboas)
Financing128.6339.8326.5473.3725.2732.6
External119.9365.5311.6433.7433.5681.7
Disbursements484.51218.81059.8420.6366.9661.5
Repayments381.3535.7946.9144.7118.20.0
Debt rescheduling25.626.83.53.50.41.4
Arrears0.00.00.00.00.00.0
Change in deposits abroad8.9344.4-195.2-154.3-184.4-18.8
Domestic (net)7.6-26.114.939.6291.750.9
Trust Fund for Development0.0115.60.00.020.939.2
Others7.6-141.714.939.6270.811.7
Of which: banking system-142.5-165.4149.7223.3428.5393.6
Privatization1.10.40.00.00.00.0
(Percent change)
Current revenue8.9-9.03.00.17.01.3
Tax revenue-7.5-7.31.27.36.35.7
Nontax revenue36.2-10.95.2-8.18.3-6.5
Total expenditure3.22.20.67.99.01.3
Current10.00.5-0.15.58.60.0
Capital-28.214.64.722.311.58.4
(In percent of GDP)
Current revenue18.116.316.115.413.312.5
Tax revenue9.68.88.68.88.58.3
Nontax revenue8.57.57.56.64.84.2
Total expenditure19.319.418.819.320.819.6
Current16.916.716.116.217.516.3
Capital2.42.72.73.23.33.3
Saving 1/1.3-0.50.0-0.8-4.2-3.7
Overall balance (deficit -)-1.1-2.9-2.7-3.7-7.5-7.1
Financing (net)1.12.92.73.77.57.1
External1.03.12.53.44.56.6
Domestic0.1-0.20.10.33.00.5
Trust Fund for Development0.01.00.00.00.20.4
Other0.1-1.20.10.32.80.1
Of which: banking system-1.2-1.41.21.74.43.8
Privatization0.00.00.00.00.00.0
(In millions of balboas)
Memorandum item:
GDP (market prices)11,62111,80812,27212,8629,64710,345
Sources: Office of the Comptroller General; Ministry of Economy and Finance; and Fund staff estimates.

Current revenue less current expenditure.

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

Current revenue less current expenditure.

Table 15.Panama: Central Government Revenue
Jan.–Sept.
200020012002200320032004
(In millions of balboas)
Total revenue and grants2,113.51,951.71,978.52,014.11,279.71,298.2
Tax revenue1,120.11,038.51,050.71,127.3816.1862.7
Direct taxes547.0514.7507.7519.2379.3394.6
Income tax494.2453.8451.7435.2319.9333.1
Wealth tax52.760.956.184.059.461.5
Taxes on foreign trade201.9172.4184.2200.1137.5148.7
Export taxes0.20.00.00.00.00.0
Import taxes201.7172.4184.2200.1137.5148.7
Taxes on domestic transactions371.3351.4358.7407.9299.2319.4
Tobacco and beverages32.533.431.137.126.732.5
Value added tax165.6154.1155.0193.3135.2165.3
Petroleum products108.8106.9115.6116.789.476.7
Other64.457.157.060.847.944.9
Nontax revenue988.4880.7926.3850.9465.6435.6
Panama Canal142.4141.1152.1144.6109.3104.9
Other services176.2161.8192.4163.1111.3105.4
Transfers from rest of public sector340.5251.9211.7206.6145.2140.6
Of which:
Consolidated public sector109.382.376.060.842.042.7
Nonconsolidated public sector231.2169.5135.7145.8103.297.9
Interest earnings and dividends329.4325.9370.1336.599.984.2
Capital revenue1.232.01.535.9-2.00.0
Grants3.80.60.00.00.00.0
(In percent of GDP)
Total revenue and grants18.216.516.115.713.312.5
Tax revenue9.68.88.68.88.58.3
Direct taxes4.74.44.14.03.93.8
Income tax4.33.83.73.43.33.2
Wealth tax0.50.50.50.70.60.6
Taxes on foreign trade1.71.51.51.61.41.4
Import taxes1.71.51.51.61.41.4
Taxes on domestic transactions3.23.02.93.23.13.1
Tobacco and beverages0.30.30.30.30.30.3
Value added tax1.41.31.31.51.41.6
Petroleum products0.90.90.90.90.90.7
Other0.60.50.50.50.50.4
Nontax revenue8.57.57.56.64.84.2
Panama Canal1.21.21.21.11.11.0
Services1.51.41.61.31.21.0
Transfers from rest of public sector2.92.11.71.61.51.4
Of which:
Consolidated public sector0.90.70.60.50.40.4
Nonconsolidated public sector2.01.41.11.11.10.9
Interest earnings and dividends2.82.83.02.61.00.8
Capital revenue0.00.30.00.30.00.0
Grants0.00.00.00.00.00.0
Memorandum item:
GDP (market prices)11,62111,80812,27212,8629,64710,345
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.
Table 16.Panama: Central Government Expenditure
Jan.–Sept.
200020012002200320032004
Total expenditure2,242.12,291.52,305.02,487.42,004.92,030.9
Current expenditure1,964.91,974.01,972.62,081.01,686.21,685.5
Wages and salaries641.7673.6695.5728.3534.0561.4
Goods and services178.3172.3146.9179.2140.9134.9
Interest484.6500.1508.1559.4490.0501.0
Pensions and transfers615.6562.4567.8560.2479.4445.7
Other44.765.554.353.941.942.4
Capital expenditure277.2317.5332.3406.4318.7345.4
Investment223.4242.4283.9332.3259.5265.6
Transfers53.875.148.574.159.179.7
Memorandum item:
Noninterest expenditure1,480.31,473.81,464.51,521.61,196.31184.5
(In percent of GDP)
Total expenditure19.319.418.819.320.819.6
Current expenditure16.916.716.116.217.516.3
Wages and salaries5.55.75.75.75.55.4
Goods and services1.51.51.21.41.51.3
Interest4.24.24.14.35.14.8
Pensions and transfers5.34.84.64.45.04.3
Other0.40.60.40.40.40.4
Capital expenditure2.42.72.73.23.33.3
Investment1.92.12.32.62.72.6
Transfers0.50.60.40.60.60.8
Memorandum item:
Noninterest expenditure12.712.511.911.812.411.4
(Annual percent change)
Total expenditure3.22.20.67.99.01.3
Current expenditure10.00.5-0.15.58.60.0
Wages and salaries-6.35.03.34.74.15.1
Goods and services9.2-3.4-14.722.022.1-4.3
Interest19.33.21.610.112.92.3
Pensions and transfers26.9-8.61.0-1.35.6-7.0
Other-5.946.7-17.1-0.913.51.2
Capital expenditure-28.214.64.722.311.58.4
Investment-36.38.517.117.13.92.4
Transfers50.939.6-35.552.964.534.8
Memorandum items:
Noninterest expenditure7.2-0.4-0.63.96.9-1.0
Nominal GDP11,62111,80812,27212,8629,64710,345
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.
Table 17.Panama: Operations of the Social Security Agency
Jan.–Sept.
200020012002200320032004
(In millions of balboas)
Current revenue741.9733.9724.5725.0518.7580.7
Contributions592.4584.6580.1601.6436.3482.6
Professional risk premium46.544.143.443.429.034.0
Administered funds7.56.80.00.00.02.7
Income from investment68.072.244.233.324.535.0
Other27.526.456.846.728.826.3
Current expenditure905.9982.81,055.31,104.0815.9853.4
Wages180.3204.2226.1249.5182.6193.8
Goods and services120.6134.0143.7135.797.2100.5
Transfers604.5644.3685.3718.7536.0559.1
Domestic interest0.40.30.20.10.10.0
Operating balance (deficit -)-164.0-248.9-330.9-379.0-297.2-272.7
Current transfers (net)345.8296.9279.3280.8244.8210.9
Transfers from central government346.4297.7280.4281.8245.7211.7
Transfers to central government0.50.81.11.00.80.8
Capital revenue15.115.30.51.74.9-0.1
Saving 1/197.564.1-50.0-95.5-46.5-61.1
Capital expenditure22.120.919.014.611.09.1
Fixed investment22.120.919.014.611.09.1
Overall balance (deficit -)174.942.4-70.0-111.1-58.4-71.0
(In percent of GDP)
Current revenue6.46.25.95.65.45.6
Of which:
Contributions5.15.04.74.74.54.7
Total expenditure8.08.58.88.78.68.3
Of which:
Current7.88.38.68.68.58.2
Operating balance (deficit -)-1.4-2.1-2.7-2.9-3.1-2.6
Current transfers (net)3.02.52.32.22.52.0
Overall balance (deficit -)1.50.4-0.6-0.9-0.6-0.7
Sources: Social Security Agency; and Ministry of Economy and Finance.

Including capital revenue.

Sources: Social Security Agency; and Ministry of Economy and Finance.

Including capital revenue.

Table 18.Panama: Operations of the Decentralized Agencies 1/
Jan.–Sept.
200020012002200320032004
(In millions of balboas)
Operating revenue80.284.088.978.459.059.5
Operating expenditure153.3147.2153.3149.1112.1110.2
Interest6.05.85.12.93.63.1
Other147.4141.4148.2146.2108.5107.1
Operating balance (deficit -)-73.1-63.2-64.4-70.7-53.1-50.7
Current transfers (net)57.970.491.890.370.073.2
Transfers from central government85.092.991.892.771.774.5
Transfers to central government27.122.40.02.41.71.3
Capital transfers from central government4.216.16.39.80.60.4
Capital revenue17.213.013.011.25.55.5
Saving 2/-2.24.234.121.021.827.6
Capital expenditure (fixed investment)30.525.020.59.46.94.1
Overall balance (deficit -)-24.311.326.231.216.124.3
(In percent of GDP)
Operating revenue0.70.70.70.60.60.6
Operating expenditure1.31.21.21.21.21.1
Operating balance (deficit -)-0.6-0.5-0.5-0.5-0.6-0.5
Current transfers (net)0.50.60.70.70.70.7
Overall balance (deficit -)-0.20.10.20.20.20.2
Memorandum item:
GDP (market prices)11,62111,80812,27212,8629,64710,345
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

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

Including capital revenue.

Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

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

Including capital revenue.

Table 19.Panama: Operations of the Public Enterprises 1/
Jan.–Sept.
200020012002200320032004
(In millions of balboas)
Current revenue238.9243.6244.0223.4164.7164.0
Operating expenditure159.4143.7140.9132.899.296.7
Wages and salaries46.143.848.145.333.735.1
Goods and services58.761.555.943.935.734.7
Transfers27.620.026.626.715.719.4
Other 2/22.712.59.413.012.76.0
Interest 3/4.35.90.93.91.41.5
Operating balance (deficit -)79.599.9103.190.665.567.3
Current transfers net of taxes-80.6-57.9-74.7-86.0-46.6-88.6
Transfers from central government2.03.02.11.61.40.0
Transfers to central government-81.7-59.1-74.9-57.4-41.8-40.6
Capital revenue1.80.10.00.000.0
Capital transfers from central government0.91.81.930.26.248.0
Saving 4/0.742.028.54.618.9-21.3
Capital expenditure34.721.537.1107.583.565.5
Overall balance (deficit -)-32.220.6-8.6-102.9-64.6-86.8
(In percent of GDP)
Current revenue2.12.12.01.71.71.6
Operating expenditure1.41.21.11.01.00.9
Operating balance (deficit -)0.70.80.80.70.70.7
Current transfers (net)-0.7-0.5-0.6-0.7-0.5-0.9
Capital expenditure0.30.20.30.80.90.6
Overall balance (deficit -)-0.30.2-0.1-0.8-0.7-0.8
Memorandum item:
GDP (market prices)11,62111,80812,27212,8629,64710,345
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

Includes the operations of the Hydraulic Resources and Electricity Institute (IHRE), Colon Free Zone (operating agency), Civil Aviation Authority, National Water and Sewerage Institute (IDAAN), La Victoria Sugar Corporation, Tourism Institute.

Unclassified expenditure that was authorized during a previous budget year.

Domestic interest.

Including capital revenue.

Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

Includes the operations of the Hydraulic Resources and Electricity Institute (IHRE), Colon Free Zone (operating agency), Civil Aviation Authority, National Water and Sewerage Institute (IDAAN), La Victoria Sugar Corporation, Tourism Institute.

Unclassified expenditure that was authorized during a previous budget year.

Domestic interest.

Including capital revenue.

Table 20.Panama: Domestic Debt of the Nonfinancial Public Sector(In millions of balboas; end of period)
20002001200220032004
Private sector creditors620.1747.6869.61,136.01,301.4
Short-term treasury notes114.0250.0243.4218.0236.6
Medium-term treasury notes0.00.0159.5500.0708.2
Domestic bonds102.092.881.460.831.4
Recognition bonds363.9363.9363.9345.1307.4
Private financing15.310.86.35.814.0
Other lending24.930.115.16.43.9
Public financial institutions683.9602.6579.2505.6833.7
Total domestic debt (gross)1,304.01,350.21,448.81,641.62,135.0
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.
Table 21.Panama: Accounts of the Banking System 1/(In millions of balboas, end of period)
20002001200220032004
I. National Bank of Panama
Net foreign assets6611,0641,135979604
Net foreign reserves7071,1161,1711,013633
Assets7561,1561,2151,044667
Reserve position with IMF1517161818
SDR holdings00000
Foreign currencies7084827359
Bonds00000
Deposits abroad6701,0561,117953590
Short term liabilities4326372323
Deposits from nonresidents6147711
Long-term foreign liabilities4652363429
Net domestic reserves611331-9-173-210
Domestic currency44324
Interbank deposits (net)553266-50-222-262
Checks in clearing5461384749
Net domestic assets-839-830-436-96317
Public sector (net)-1,149-1,369-1,172-962-488
Central government (net)178-5083247501
Rest of public sector (net)-1,327-1,319-1,255-1,209-988
Of which: Social Security-1,078-1,112-1,064-985-692
Private sector7489761,1191,2281,305
Official capital and surplus-500-500-500-500-500
Unclassified assets (net)63631171370
Liabilities to domestic private sector433566690710711
Demand deposits5985878494
Time deposits164245303334317
Savings deposits203229291285296
Cashier’s checks in circulation66964
II. Private Banks
Net foreign reserves8406196021,5072,114
Assets4,1444,0843,1593,6034,443
Foreign currencies139304255231247
Deposits abroad3,5333,3143,0733,2924,181
Other unclassified471466234291118
Liabilities360445196209209
Overseas operations (net)-2,943-3,020-2,361-1,887-2,120
Credit to nonresidents8,4758,6196,5766,1767,365
Operating profit or loss (-)7,2307,1135,9855,7206,467
Foreign banks4,9875,0943,8893,2083,953
Private nonresidents2,2432,0192,0962,5122,514
Other foreign liabilities4,1884,5262,9522,3433,018
II. Private Banks
Net domestic reserves-663-485-380-206-193
Domestic currency120000
Interbank deposits (net)-675-485-380-206-193
Net domestic assets10,52811,33910,91810,57011,356
Net credit to public sector137207-75-7-3
Private sector credit11,11711,76611,17411,00311,587
Unclassified assets (net)-726-634158-9930
Liabilities to the private sector10,70411,47311,14011,87113,277
Monetary liabilities8,1508,8428,7159,1269,947
Demand deposits1,0951,1931,2331,3541,499
Time and savings deposits7,0557,6497,4827,7728,448
Time deposits5,8396,1735,7975,9076,410
Savings deposits1,2161,4761,6851,8652,038
Private capital and surplus2,5552,6312,4252,7453,330
III. Savings Bank
Foreign assets (net)51072-12
Net domestic reserves200-1176150137
Domestic currency00020
Deposits in local banks (net)196-3174144135
Demand deposits65566
Time deposits20518169139129
Deposits of banks-14-26000
Checks in clearing41232
Net domestic assets170396319385434
Public sector (net)-203-260-151-165-211
Central government12120141152
Loans and advances12120141152
Rest of public sector-204-261-271-307-363
Loans and advances-126-118-128-96-168
Deposits-78-143-143-210-195
Private sector465517533551747
Loans and discounts433500519539738
Investment331714138
Unclassified assets (net)112495513227
Official capital and surplus103110118133129
Liabilities to private sector376404502537560
Demand deposits1217221925
Time and savings deposits364387478501525
Time deposits142153171159146
Savings deposits221234286297297
IV. Consolidated Banking System
Net foreign assets1,5061,6931,7442,4882,706
Assets4,9095,2504,3844,6515,120
Liabilities455523272268283
Overseas operations (net)-2,949-3,034-2,368-1,894-2,131
Credit to nonresidents8,4758,6196,5766,1767,365
Deposits from nonresidents7,2367,1275,9925,7276,478
Other foreign liabilities4,1884,5262,9522,3433,018
Net domestic assets10,00010,74310,57710,60711,828
Public sector (net)-1,216-1,422-1,399-1,134-701
Credit7678017517591,021
Deposits-1,983-2,223-2,149-1,894-1,722
Private sector credit12,33013,25912,82612,78313,638
Official capital and surplus-603-610-618-633-629
Unclassified assets (net)-652-322-9-157-201
Other assets (net)9451,1621,2471,1821,075
Other items (net)-1,597-1,485-1,256-1,339-1,277
Net domestic reserves141-162-224-252-279
Domestic currency1613344
Net interbank deposits74-222-259-300-330
Checks in clearing5862405051
Cashier’s checks in circulation-6-6-9-6-4
Liabilities to private sector11,50712,43612,32113,09514,534
Monetary liabilities8,9529,8059,87510,30511,121
Demand deposits1,1661,2961,3421,4581,618
Time and savings deposits7,7868,5108,5338,8479,504
Time deposits6,1456,5726,2716,4006,874
Savings deposits1,6411,9382,2622,4472,630
Private capital and surplus2,5552,6312,4252,7453,330
Sources: National Bank of Panama; Superintendency of Banks; and the Savings Bank.

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

Sources: National Bank of Panama; Superintendency of Banks; and the Savings Bank.

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

Table 22.Panama: Banking System Credit to the Private Sector
20002001200220032004
(In millions of balboas; end of period)
Total10,80111,21810,89211,26612,299
Commerce3,8153,4753,1123,1563,421
Housing2,7562,7983,0193,2473,463
Other construction256403372456607
Industry509708639593630
Personal consumption2,3072,3912,4832,5592,789
Financial and insurance enterprises8081,018877833887
Agriculture148145136153195
Livestock156189188217256
Fishing3428252117
Other1263413135
(12-month percentage change)
Total5.53.9-2.93.49.2
Commerce1.8-8.9-10.41.48.4
Housing13.31.57.97.66.6
Other construction12.857.4-7.722.633.2
Industry8.339.1-9.7-7.26.2
Personal consumption9.93.63.83.19.0
Financial and insurance enterprises-14.926.0-13.9-5.06.5
Agriculture24.4-2.0-6.212.527.2
Livestock1.321.2-0.515.418.0
Fishing0.0-17.6-10.7-16.0-18.8
(In percent of total credit)
Total100.0100.0100.0100.0100.0
Commerce35.331.028.628.027.8
Housing25.524.927.728.828.2
Other construction2.43.63.44.04.9
Industry4.76.35.95.35.1
Operating expenditure21.421.322.822.722.7
Financial and insurance enterprises7.59.18.17.47.2
Agriculture1.41.31.21.41.6
Livestock1.41.71.71.92.1
Fishing0.30.20.20.20.1
Source: Superintendency of Banks.
Source: Superintendency of Banks.
Table 23.Panama: Foreign Operations of Private Banks 1/(In billions of U.S. dollars, end of period)
20002001200220032004
Foreign assets19.819.716.015.817.4
Foreign reserves7.36.65.56.16.0
General license banks4.14.13.23.64.4
Offshore banks 2/3.22.52.42.51.6
Credit to nonresidents12.513.110.59.711.3
General license banks8.58.66.66.27.4
Offshore banks4.04.54.03.63.9
Foreign liabilities18.518.714.913.614.5
Short-term liabilities0.40.40.50.30.3
General license banks0.40.40.20.20.2
Offshore banks0.00.00.30.10.1
Deposits from nonresidents13.012.810.710.210.5
General license banks7.27.16.05.76.5
Banks5.05.13.93.24.0
Nonbanks2.22.02.12.52.5
Offshore banks5.85.74.74.54.1
Other liabilities5.15.53.83.13.7
General license banks4.24.53.02.33.0
Offshore banks0.90.90.80.80.7
Capital and reserves0.40.40.50.60.7
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 24.Panama: Interest Rate Structure(In percent)
20002001200220032004
Lending rates (less than one year)
Commercial10.010.08.47.57.2
Industrial9.19.78.88.78.5
Personal13.212.412.212.212.2
Domestic deposit rate (six-month)6.55.53.83.32.1
U.S. prime rate (six-month)9.26.84.74.14.4
LIBOR (six-month)6.63.11.91.31.8
Difference between the deposit rate and LIBOR (percentage points)-0.22.41.92.00.3
Source: Superintendency of Banks.
Source: Superintendency of Banks.
Table 25.Panama: Public Sector Banks—Operating Revenue and Expenditure(In millions of balboas)
20002001200220032004
I. National Bank of Panama
Operating profit or loss (-)117.276.2104.291.211.2
Operating revenue161.5139.5130.9146.3142.6
Net interest143.6120.2101.6118.4124.3
Interest receipts (cash)251.7212.2147.1147.9154.9
Interest payments accrued-108.1-92.0-45.5-29.5-30.6
Noninterest income17.919.329.327.918.3
Operating expenditure44.363.326.755.1131.4
Wages and salaries22.823.122.923.324.2
Goods and services14.414.916.017.919.2
Other7.125.3-12.213.988.0
II. Savings Bank
Operating profit or loss (-)10.413.220.625.427.4
Operating revenue31.836.245.552.959.5
Net interest23.426.032.637.037.5
Interest receipts (cash)60.568.172.174.177.7
Loans40.546.152.056.062.0
Fixed deposits15.213.38.75.43.5
Investments4.88.711.412.712.2
Interest payments accrued (-)-37.0-42.1-39.4-37.1-40.3
Noninterest income8.310.212.815.922.1
Operating expenditure21.423.024.927.532.1
Expenditure25.228.937.740.064.1
Wages and salaries13.414.715.817.620.6
Other operating expenses8.08.39.19.911.5
Depreciation2.12.93.23.43.6
Provisions for bad loans1.62.99.69.128.4
III. National Mortgage Bank
Operating profit or loss (-)-0.3-0.50.0-1.50.0
Operating revenue7.16.55.65.95.6
Net interest3.32.82.82.42.8
Interest receipts (cash)9.18.05.66.45.6
Loans8.47.55.46.25.4
Fixed deposits0.70.40.10.10.1
Investments0.00.10.10.10.1
Interest payments cash5.85.22.84.02.8
Noninterest income3.83.72.83.52.8
Operating expenditure (cash)7.47.05.67.45.6
Wages and salaries4.24.14.04.44.0
Goods and services3.22.91.63.01.6
IV. Agricultural Development Bank
Operating profit or loss (-)-4.7-3.1-1.8-1.7-1.4
Operating revenue4.35.96.97.47.6
Net interest3.55.16.36.97.2
Interest receipts (cash)—loans5.87.37.98.38.4
Interest payments accrued2.32.21.61.41.2
Noninterest income0.80.80.60.50.4
Operating expenditure (cash)9.09.08.79.19.0
Wages and salaries4.54.64.74.95.0
Goods and services4.54.44.04.24.0
Sources: National Bank of Panama; Savings Bank; National Mortgage Bank; and Agricultural Development Bank.
Sources: National Bank of Panama; Savings Bank; National Mortgage Bank; and Agricultural Development Bank.
Table 26.Panama: Public Sector Banks—Portfolio in Arrears(In millions of balboas)
20002001200220032004
I. National Bank of Panama
Total private sector portfolio689.3817.5968.51155.11226.9
Commerce68.490.1116.9178.5177.6
Agriculture and forestry119.9132.8141.7166.9177.7
Personal loans450.7506.8588.3672.1719.3
Others50.387.9121.6137.6152.3
Total arrears80.3111.089.875.798.2
Commerce16.717.112.713.527.9
Agriculture and forestry15.520.617.89.411.6
Personal loans41.561.146.344.849.2
Others6.612.213.08.09.5
Share of arrears in total portfolio11.613.69.36.68.0
Commerce24.419.010.97.615.7
Agriculture and forestry12.915.512.65.66.5
Personal loans9.212.17.96.76.8
Others13.113.910.75.86.2
Loans with payments overdue80.3111.089.875.798.2
Between 30 and 90 days43.751.737.036.638.4
Over 90 days36.659.352.839.159.8
Percent of total with payments overdue100.0100.0100.0100.0100.0
Between 30 and 90 days54.446.641.248.339.1
Over 90 days45.653.458.851.760.9
II. Savings Bank
Total portfolio432.6500.2521.2547.7738.2
Mortages301.3321.9334.6338.7350.7
Personal loans94.881.570.384.176.9
Operating expenditure36.596.7116.4124.9310.7
Loans overdue62.268.4125.1114.3154.5
Mortages....100.592.173.0
Personal loans....11.34.08.5
Other..13.318.272.9
Share of arrears in total portfolio14.413.724.020.920.9
Share of arrears in their individual portfolios..
Mortages..30.027.220.8
Personal loans....16.14.711.1
Other....11.514.623.5
III. National Housing Bank 2/
Total portfolio193.4184.7182.4176.9166.3
Total arrears44.154.159.364.973.7
Share of arrears in total portfolio22.829.332.536.744.3
IV. Agricultural Development Bank 3/
Total portfolio90.9100.5100.8103.6102.2
Loans overdue23.628.425.930.932.9
Loans overdue as a share of total portfolio26.028.325.729.832.2
Loans with payments overdue23.628.425.930.932.9
Overdue 30–90 days2.93.13.53.93.7
More than 90 days overdue20.825.422.427.029.2
Percent of total with payments overdue100.0100.0100.0100.042.8
Overdue 30–90 days12.210.813.512.64.8
More than 90 days overdue87.889.286.587.438.0
Sources: National Bank of Panama; Savings Bank; National Mortgage Bank; and Agricultural Development Bank.

In 2001 the Superintendency of Banks introduced a new methodology to determine arrears on commercial bank loans. In previous years only the outstanding installments were recorded as arrears on loans on which scheduled payments had not been made for between 30 and 90 days. For loans more than 90 days overdue, some banks continued to define as arrears only the outstanding installments, while others included the entire balance outstanding. By end-2001 all banks were required to register the entire outstanding balance of a loan as in arrears, once payment was more than 30 days overdue. This led to a significant increase in arrears in the accounts of the Banco National de Panama. End-2000 data have been adjusted to reflect the new standard. In addition, the BNP has also increased its provisioning substantially.

This portfolio includes bad loans related to projects financed through the Ministry of Housing for lower income families.

Excludes portfolio in arrears for more than one year.

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

In 2001 the Superintendency of Banks introduced a new methodology to determine arrears on commercial bank loans. In previous years only the outstanding installments were recorded as arrears on loans on which scheduled payments had not been made for between 30 and 90 days. For loans more than 90 days overdue, some banks continued to define as arrears only the outstanding installments, while others included the entire balance outstanding. By end-2001 all banks were required to register the entire outstanding balance of a loan as in arrears, once payment was more than 30 days overdue. This led to a significant increase in arrears in the accounts of the Banco National de Panama. End-2000 data have been adjusted to reflect the new standard. In addition, the BNP has also increased its provisioning substantially.

This portfolio includes bad loans related to projects financed through the Ministry of Housing for lower income families.

Excludes portfolio in arrears for more than one year.

Table 27.Panama: Summary of Balance of Payments
Jan.–Sept.
1999200020012002200320032004
(In millions of U.S. dollars)
Current account-1,159-689-174-61-442-580-735
Trade balance excluding Colon Free Zone-1,918-1,658-1,225-1,382-1,476-1,088-1,205
Exports, f.o.b.8531,0471,079970987720792
Imports, f.o.b. (-)-2,772-2,705-2,304-2,352-2,463-1,808-1,997
Net exports from Colon Free Zone57851552934635910092
Re-exports, f.o.b.4,4354,7914,9144,3454,0572,8653,419
Imports, f.o.b. (-)-3,857-4,276-4,384-3,998-3,698-2,764-3,328
Services, net7018548999811,254929935
Travel, net206269310334377267290
Travel credits396458486513585420466
Travel debits-190-188-176-179-208-153-176
Transportation, net416545537592799583606
Colon Free Zone-242-269-290-275-255-188-230
Panama Canal Authority698748709778890650750
Other-40661188916412186
Other services79395254797839
Income, net-691-577-602-250-820-695-740
Private sector-456-330-28978-438-346-380
Public sector-236-247-313-328-382-349-360
Of which:
NFPS interest-327-366-415-449-474-412-422
Current transfers, net171177226244241174183
Capital and financial account1,364203890367163319193
Capital account (public sector grants)3220009
Financial account1,361201889367163319184
Public sector-64103325350290142124
Nonfinancial public sector-63117339322288131123
Disbursements6304851,2191,076421386663
Amortization-414-392-536-946-288-255-541
Other-28024-34519215500
National Bank of Panama (BNP)-6-6-7-8-800
Other portfolio flows (net)5-8-73610101
Private sector, medium and long-term409931-270129430288-91
Direct investment86470040599792612425
Portfolio investment-546-96-743-49-5987-410
Loans913276979-302-410-106
Short-term flows1,016-832833-112-557-111151
Errors and omissions-296395-301-24313018912
Overall balance-91-9141662-149-71-530
Financing9191-416-6214971530
Net foreign assets of the BNP82117-409-5415876534
Net use of Fund credit-23-52-34-8-9-5-5
Exceptional financing3226270000
(In percent of GDP)
Memorandum items:
Merchandise exports7.49.09.17.97.7
Merchandise imports-24.2-23.3-19.5-19.2-19.2
Net exports from Colon Free Zone5.04.44.52.82.8
Current account-10.1-5.9-1.5-0.5-3.4
Direct foreign investment7.56.03.40.86.2
Sources: Office of the Comptroller General; and Fund staff estimates.
Sources: Office of the Comptroller General; and Fund staff estimates.
Table 28.Panama: Direction of Trade 1/(In percent)
Jan.–Sept. 2/
200020012002200320032004
Exports, f.o.b100.0100.0100.0100.0100.0100.0
Western hemisphere70.374.473.170.870.266.5
United States43.348.145.849.949.547.2
Central America and the Caribbean20.819.922.016.916.415.3
South America2.74.02.62.02.22.3
Other3.52.42.72.02.11.7
Europe22.920.222.224.824.627.0
Belgium and Luxembourg5.24.54.43.63.53.8
Germany1.73.20.90.50.50.6
Italy3.32.71.01.21.31.4
Sweden8.53.76.16.25.96.8
Other4.26.19.813.313.414.4
Other countries6.85.44.74.45.26.5
Of which:
Exports through the Colon Free Zone1.31.11.31.21.00.9
Imports, c.i.f. 3/100.0100.0100.0100.0100.0100.0
Western hemisphere65.666.465.769.965.164.4
United States32.732.633.434.434.729.1
Mexico3.94.03.73.83.84.2
Central America and the Caribbean9.08.512.319.914.417.9
Costa Rica3.53.64.24.84.85.0
Trinidad and Tobago0.10.11.30.60.60.6
Other5.44.86.814.59.012.3
South America20.021.316.311.812.213.2
Venezuela6.65.24.22.72.93.3
Ecuador7.27.93.30.20.20.2
Brazil1.11.11.63.03.13.4
Other5.17.17.25.96.06.3
Europe9.28.67.77.98.27.6
Germany1.61.71.51.61.61.3
France0.51.50.60.60.60.6
Spain1.81.71.41.61.61.3
Italy0.70.60.60.70.70.6
Netherlands0.60.60.60.50.50.5
United Kingdom0.90.70.60.80.90.4
Other3.11.82.42.12.32.9
Other countries25.225.026.622.226.728.0
Of which:
Imports from the Colon Free Zone12.012.013.012.511.911.7
Sources: Office of the Comptroller General; and Fund staff estimates.

Based on customs data.

Preliminary information

Excludes sales of bunker oil.

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

Based on customs data.

Preliminary information

Excludes sales of bunker oil.

Table 29.Panama: Operations of the Colon Free Zone(In millions of balboas)
Jan.–Mar. 1/
200020012002200320032004
Imports 2/4,630.24,759.54,358.34,146.6883.61,051.1
Textiles and clothing1,188.21,310.01,142.31,055.8226.8280.7
Beverages and tobacco102.3116.5144.4132.524.441.8
Chemical products642.6717.2672.5719.7159.3169.3
Instruments272.6248.4236.0194.938.152.9
Machinery and transport goods1,271.31,266.41,137.11,112.6240.4277.7
Other1,153.21,101.01,026.0931.1194.6228.7
Exports, f.o.b. 2/5,318.75,410.14,837.14,566.9954.81,139.3
Textiles and clothing1,312.91,400.61,224.31,048.8214.2247.4
Beverages and tobacco108.2133.7146.4143.125.335.8
Chemical products959.5990.3921.0986.6220.5247.9
Instruments278.2261.4231.5208.044.752.2
Machinery and transport goods1,438.21,408.31,243.31,211.4252.2303.6
Other1,221.71,215.81,070.6969.0197.9252.4
Memorandum item:
Number of Panamanians employed in Colon Free Zone 3/14,57515,30015,15213,349
Sources: Office of the Comptroller General; Administration of the Colon Free Zone; and Fund staff estimates.

Preliminary information.

Excludes balance of payments adjustments.

Average for the year.

Sources: Office of the Comptroller General; Administration of the Colon Free Zone; and Fund staff estimates.

Preliminary information.

Excludes balance of payments adjustments.

Average for the year.

Table 30.Panama: Composition of Merchandise Exports(In millions of balboas, unless otherwise specified)
Prel.
20002001200220032004
Merchandise exports, f.o.b. 1/1,047.41078.8970.1987.41,113.4
Petroleum exports158.0134.3102.0
Nonpetroleum exports, f.o.b 2/.779.1809.0759.6805.0890.3
Bananas
Value159.8122.1113.2112.8108.2
Volume (millions of boxes)29.223.623.022.521.9
Unit value per box5.55.24.95.04.9
Sugar
Value19.913.915.112.710.4
Volume (thousands of metric tons)69.041.137.935.227.5
Unit value per pound0.10.20.20.20.2
Shrimp
Value59.470.358.156.553.8
Volume (thousands of metric tons)5.96.75.77.27.2
Unit value per pound4.64.84.63.63.4
Coffee
Value16.011.19.312.210.9
Volume (thousands of metric tons)7.47.05.47.05.1
Unit value per pound1.00.70.80.81.0
Fishmeal
Value8.27.64.210.96.2
Volume (thousands of metric tons)29.123.610.828.014.4
Unit value per pound0.10.20.20.20.2
Other seafood
Value81.496.0101.8132.0160.8
Volume (thousands of metric tons)28.832.533.039.446.7
Unit value per pound1.31.31.41.51.6
Clothing
Value18.015.312.811.08.8
Volume (metric tons)0.60.50.50.60.5
Unit value per pound13.614.011.68.38.0
Other exports
Value416.4472.7445.1456.9531.2
Re-exports28.845.440.733.829.4
Adjustment 3/81.590.167.8
Sources: Office of the Comptroller General; and Fund staff estimates.

Including re-exports and adjustment (coverage and valuation). Petroleum export data for 2003 are not available.

Excluding re-exports and adjustment (coverage and valuation).

For reconciliation between total merchandise exports, and the breakdown that come from a different database.

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

Including re-exports and adjustment (coverage and valuation). Petroleum export data for 2003 are not available.

Excluding re-exports and adjustment (coverage and valuation).

For reconciliation between total merchandise exports, and the breakdown that come from a different database.

Table 31.Panama: Travel Receipts and Expenditure, and Number of Visitors
Jan.–Sep.
200020012002200320032004
(In millions of balboas)
Net travel receipts269.4303.6334.2376.9267.1290.0
Travel receipts457.8477.1513.0584.6420.5466.4
Tourists193.0201.3215.7248.1179.6199.1
Business, official, and education related travel98.1103.3104.1115.187.092.9
Travelers in transit and others166.7172.5193.2221.4153.9174.4
Expenditure of Panamanians traveling abroad (-)-188.4-173.5-178.8-207.7-153.4-176.4
(In thousands)
Visitors 1/472.4485.2502.3542.3398.7424.7
Tourists318.8324.1342.7368.5267288.6
Business, official, and education related travel153.6161.1159.6173.8131.7136.1
Travelers in transit 2/685.2715.9818.8887.8611.6719.9
Sources: Office of the Comptroller General; and Fund staff estimates.

Entries into Panama excluding residents, immigrants, and persons in transit or whose destination is the Canal area.

Nonresidents who spent less than 48 hours in Panama.

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

Entries into Panama excluding residents, immigrants, and persons in transit or whose destination is the Canal area.

Nonresidents who spent less than 48 hours in Panama.

Table 32.Panama: External Public Debt Indicators(In percent)
20002001200220032004
Debt-service ratios 1/
In percent of central government receipts 2/35.948.770.537.856.4
Principal due18.527.447.814.330.0
Interest due17.321.222.723.626.3
In percent of GDP6.58.011.45.98.2
Principal due3.44.57.72.24.4
Interest due3.23.53.73.73.8
In percent of exports of goods and nonfactor services21.326.338.819.525.4
Principal due11.014.826.37.413.5
Interest due10.311.512.512.211.9
External debt in terms of GDP 3/48.253.051.750.652.6
Multilateral and bilateral 4/12.812.112.312.010.9
Of which
IMF0.80.50.40.30.3
Other 5/35.440.939.538.641.7
Effective external interest rate on total debt 6/6.56.67.17.37.3
Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

Debt-service ratios exclude payments due on short-term debt, but include payments due to the IMF.

Central government receipts include transfers from the rest of the public sector and exclude grants.

Includes interest arrears.

Includes insured suppliers’ credits.

Includes nonguaranteed suppliers’ credits.

Interest rate on outstanding debt at the end of the period.

Sources: Office of the Comptroller General; and Ministry of Economy and Finance.

Debt-service ratios exclude payments due on short-term debt, but include payments due to the IMF.

Central government receipts include transfers from the rest of the public sector and exclude grants.

Includes interest arrears.

Includes insured suppliers’ credits.

Includes nonguaranteed suppliers’ credits.

Interest rate on outstanding debt at the end of the period.

48Prepared by Pablo Druck (WHD).
49Imports that enter duty-free from all countries (38 percent of the total) would be unaffected by trade diversion.
50The VAT rate is 5 percent, but some goods are exempt.
51These percentages are applied to each of the 8-digit tariff lines for which there were imports from both the United States and third countries in 2003.
52From 1994 to 2003, the U.S. share of Mexico’s imports decreased from 72 percent to 62 percent (source: IMF, Direction of Trade Statistics).
53Fukao K., T. Okubo, and R. Stern, 2003, “An Econometric Analysis of Trade Diversion under NAFTA”, North American Journal of Economics and Finance, vol. 14, pp. 3–24.

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