sovereign credit rating was raised to one level below investment
grade by Standard & Poors as the country posts
record economic growth and reduces debt.
The increase to BB+ from BB made the Central American nations
rating equal to those of Brazil and Peru. Panamas
outlook is stable, while its short-term rating of B was
also affirmed, New York-based S&P said in a statement.
Panamas economy, which has averaged growth of 6.5
per cent since 2002, likely expanded ten per cent last year
on increased revenue from the canal, which remains the main
driver of growth, S&P said.
The slowdown of the global economy will cut Panamas
pace of growth to 6.5 per cent in 2008, S&P said. Panama
is rated Ba1 by Moodys Investors Service and BB+ by
its good news for the credit, its not unexpected,
said Claudia Calich, who manages US$1 billion in emerging-market
debt for Invesco Inc in New York. The ratings increase now
puts all three agencies on the same level.
The governments debt probably dropped to 33 per cent
of gross domestic product last year from 42 per cent in
2004. Panama has US$8.27 billion of debt, according to S&P
Panama will post a record surplus of 0.7 per cent of GDP
for 2007 after a deficit of 5.6 per cent in 2004, S&P
Tourism, construction and international financial institutions
are helping to diversify Panamas economy, according
to the credit rating company.
The expansion of the canal wont hurt the governments
finances as long as it remains on budget, S&P said.