Friday
Friday 21st February 2025.
February 20, 2025
The year 2024 closed with a fiscal deficit, that is, a shortfall after calculating income and expenses, of 6,416 million dollars, in the accounts of the Panamanian State.
This deficit represented 7.35% of the total gross domestic product (GDP), reported the Minister of Economy and Finance, Felipe Chapman, during a meeting with international investors.
Chapman had anticipated in October of last year during a conference at the Panamanian Association of Business Executives (Apede) that the deficit would mean between $3.2 billion and $3.5 billion of the country’s total gross domestic product, but now the figures are higher.
In the Fiscal Balance report for the end of December , the MEF details that the fiscal deficit of the Non-Financial Public Sector (SPNF) was higher than that provided for by the cap in the Fiscal Social Responsibility Law (LRSF), of 2% of GDP. However, this law was subsequently modified on October 28, 2024, and did not establish caps for the SPNF fiscal deficit in 2024.
The MEF listed the inherited factors that increased the fiscal deficit, which included an overestimation of revenues of 2,207 million dollars (3.1% of GDP); unbudgeted accounts payable of 786 million dollars (0.9% of GDP); and the overestimation of low execution of spending on continuity projects of 1,921 million dollars (2.2% of GDP).
The report published on the MEF website details that the Central Government’s revenue collection target was not met in 2024.
The Central Government’s current income budget for the 2024 period was 11 thousand 834.6 million dollars . However, the sum of 9 thousand 459.8 million dollars was collected , which represents a difference of 2 thousand 374.8 million dollars or 20.1% .
Chapman said that in order to reverse the current fiscal pressure on the State’s public finances, structural measures will be implemented to stabilise the economy and encourage sustained growth.
He explained that part of this will be achieved with the adjustment made to the Law of Fiscal Social Responsibility, to simplify the fiscal rule and strengthen transparency in public policy.
He also reiterated that spending growth is being controlled and clear goals are being set for debt reduction; the Fiscal Council is being strengthened, an expenditure control unit is being created in the MEF and the institute for medium and long-term economic planning is being established.
For this year, Chapman reiterated that economic growth is expected to be between 4% and 5%, well above the regional average, and plans are being made to reduce the fiscal deficit from 3.88% projected in 2025 to 1.5% in 2030, along with a sustained decrease in the debt/GDP ratio.
“This transformation will consolidate a solid public management model, capable of generating confidence and resilience in the face of future challenges, positioning Panama as a benchmark in fiscal stability and sustainable growth in the region,” the minister stressed.
The President of the Republic, José Raúl Mulino , defended the recent arrival of migrants deported from the United States and denied that the process violates laws or international agreements.
During his weekly press conference on Thursday, February 20, the president stated that cooperation on migration issues is based on “reciprocity” and criticized the lack of attention when the country was facing a massive flow of migrants through the Darien jungle.
“I am surprised that in this case, when they are coming in the opposite direction, they are raising their voices; for 299. When we had hundreds of thousands in Darien a year ago, nobody said anything,” he said.
Mulino explained that among the 299 migrants received, there are 157 women, 142 men, 12 family groups and 24 minors. He also indicated that 13 people have already voluntarily returned to their countries, while 97 are in Darién awaiting their transfer.
The president emphasized that Panama has not incurred any costs for this operation, since the expenses are fully covered by the International Organization for Migration (IOM) and under the umbrella of the memorandum of understanding with the United States, signed by the Mulino administration and former President of the United States, Joe Biden, on July 1, 2024.
However, the president later stated that the reception of migrants is a bilateral effort within a framework of international cooperation , in which other countries in the region participate, such as Costa Rica, Guatemala and El Salvador.
He also said that the migrants are being treated with dignity. “It is false and I deny out of falsehood that we are mistreating them. You have to be very perverse to think that we, as Panamanians, are going to mistreat these poor people who are victims of a reality,” he said, adding that the orderly handling of the situation avoids a bigger problem for the country.
According to Mulino, the number of migrants crossing the Darien River towards the United States has decreased significantly compared to previous months, with 250 people counted until February.
The president also rejected criticism about the lack of transparency in the process and clarified that immigration circumstances are constantly changing. “We have collaborated with the logistics. There is nothing opaque here.”
He also announced that he has asked Foreign Minister Javier Martínez-Acha to begin drafting a new memorandum of understanding with the United States to regulate future immigration operations.
Three flights with migrants arrived in Panama from the United States. They are people of various nationalities: Iran, China, Afghanistan, Syria, among others.
On Wednesday, February 19, President José Raúl Mulino met with the new Nicaraguan ambassador to Panama, Jessica Yaoska Padilla Leiva , at the Presidency of the Republic, as confirmed by the president. One of the central topics of the conversation was the status of Ricardo Martinelli, entrenched in the embassy of the Central American country.
At the weekly press conference on Thursday, February 20, Mulino explained that Padilla Leiva was received at the Presidency and that she also sent a personal message to the President of Nicaragua, Daniel Ortega.
“Yes, I spoke with her yesterday. I invited her here to the Presidency in the morning and sent a personal message to President Daniel Ortega, with great respect, which I cannot make public at this time out of basic courtesy. The Martinelli issue, of course,” said the president.
Padilla Leiva’s appointment was formalized following the request for approval submitted by the Ministry of Foreign Affairs of Nicaragua on December 24, 2024, following the resignation of the previous ambassador, Consuelo Sandoval Meza.
His arrival opens the possibility of Martinelli leaving Panama.
Prior to the recent meeting, Mulino said that they would speak with the new ambassador about “many issues,” including the safe-conduct, a mechanism that would allow former President Ricardo Martinelli to travel to Nicaragua, whose regime granted him asylum in its embassy in Panama since February 7, 2024.
The President of the Republic, José Raúl Mulino, announced this Thursday, February 20, 2025, that the Panama Metro fare will be reviewed.
“Sooner rather than later, the Metro fare will have to be revised,” said the president, who added that the entire Metro network, with lines 1, 2 and 3 (the latter under construction), does not have a fare that is in line with the enormous need for maintenance it requires.
“At 35 cents per passenger, it will be unsustainable very soon,” the president said.
Specifically, the fare for Metro Line 1 is established in Executive Decree 367 of May 23, 2014, which “Sets the price of the Panama Metro fare.” Article 1 sets the fare at 0.35 cents per individual one-way ticket, which came into effect on June 15, 2014. The fare does not contemplate integration with other public transportation services and is subject to discounts established by law. This decree was signed by former President Ricardo Martinelli.
Meanwhile, the fare for Line 2 (Panama East) is established in Executive Decree No. 91 of May 9, 2019, where in its article 1 the price of the individual ticket is set at 0.50 cents, as of May 13, 2019. In addition, it included the discounts established by law for retirees, students and people with disabilities. This decree was signed by then-President Juan Carlos Varela.
For the president, the current fare for the operation of the Panama Metro is “unsustainable.” He indicated that the state subsidy is increasingly higher and is becoming unsustainable. The current fare of $0.35 per passenger is not enough to cover the maintenance costs of the entire system, which is why it is necessary to review it to ensure its sustainability.
Regarding costs, the president explained that expensive maintenance must be carried out on the trains, such as changing wheels and electrical systems. However, with the addition of Line 3, which is currently under construction, expenses will increase. The cost of this project is already around $5 billion, said the president.
Mulino called on citizens to reflect on the need to adjust the tariff. He said that the State cannot continue to subsidize such a costly infrastructure indefinitely.
He stressed that currently, the cost of public transportation , including that of the so-called “pirates,” is significantly higher than that of the Metro. “When they have to use pirates, they pay $2.50 to $3.00 to come from somewhere in the west, from La Chorrera, to here (Panama City), and the Metro will solve a large part of their lives. And I don’t think we can think that such a route, with such an investment, can be maintained with a fare of 35 cents.”
For his part, Luis Torres of the National Association of Public Transport Users expressed his disagreement with the possible increase in the Panama Metro fare, proposed by the president. He pointed out that the metro is used mainly by low-income people, such as warehouse workers, restaurant workers and security guards, who do not have sufficient income to assume an increase in fares.
He criticised the fact that this measure could affect the most needy population. He also considered that any decision on the increase in the fare should be consulted first with users who depend on public transport, not with those who have their own vehicles.
Finally, he warned that a fare increase could leave low-income people with limited mobility options, such as the Metro Bus or even walking, affecting their quality of life.
Last year, the Panama Metro on both lines (1 and 2) mobilized more than 117 million passengers. According to the Panama Metro demand report, on average, more than 275,500 users are transported on line 1, while on line 2, more than 12,400 users.