Panama to Implement "Sovereign Fund"

Alberto Vallarino, Minister of Economy and Finance, explained that it will function as a stabilization fund, ensuring that budgets are balanced and without deficit, adding that its management will be totally independent from the government.

These types of funds are commonly used in countries with large surpluses of income, such as oil-producing nations and Singapore.

An article in Panamaamerica.com.pa states that "Among Latin American countries the model that the government finds most appealing at the moment is Chile’s, which is closely related to Panama," and also "they are evaluating the structure of the fund Norway is currently employing. "

Source: Padigital.com.pa

More on this topic

Panama's Sovereign Fund

February 2012

According to government projections, Panama's future sovereign fund will have $12.5 billion in assets by 2025.

This fund will be used to combat natural disasters or adverse economic circumstances.

"Every year, of the contributions generated by the Canal to the State, a portion will go to the National Treasury - the equivalent of 3% of gross domestic product (GDP) - and anything in excess of that amount will be saved" in the sovereign fund, explained Prensa.com.

Sovereign Fund to be Created , Panama’s Main Task for 2012

December 2011

The fund, which will receive the additional revenue generated by the Panama Canal when the new locks come into operation, will be the Government’s main task next year.

The Minister of Economy and Finance in Panama, Frank De Lima, in a meeting with the press, said that the priority for his department will be to create a draft bill to be debated in the political and social arena before being sent to the National Assembly.

Panama Failing to Meet Fiscal Deficit Target

November 2011

While legally the fiscal deficit may reach as high as 3% during 2011, the government had announced that it would not exceed 2%, which now looks impossible to achieve.

Tax revenues are not meeting the levels predicted at the beginning of the budget year, which seems likely to mean that Panama's fiscal deficit will go above the target of 2% of GDP set for the year

Panama Canal Expansion to be Awarded in July

May 2009

Experts are reviewing technical aspects of the largest contract worth $5.25 billion, and contract adjudication is expected by July.

The president of the Panama Canal Authority (ACP), Alberto Alemán, made the announcement at the Reuters Investment Forum on Latin America.