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Panama's President Sees 2015 Fiscal Deficit Cut to 2 Pct of GDP

  • Reuters

Panama's President Juan Carlos Varela talks to the media during a surprise visit at Atlapa Convention Center where the upcoming 7th Summit of the Americas will be held on April 10 and 11, in Panama City, April 2, 2015.

Panama's President Juan Carlos Varela talks to the media during a surprise visit at Atlapa Convention Center where the upcoming 7th Summit of the Americas will be held on April 10 and 11, in Panama City, April 2, 2015.

Panama's President Juan Carlos Varela said on Wednesday that his country is on track to lower its fiscal deficit to 2 percent of gross domestic product (GDP) this year, despite slowing growth in the Central American nation.

Last year Panama ran a deficit of 4.1 percent of GDP, and Varela said in an interview the country could halve it in 2015.

“I think we're going to get there [2 percent], and that there will be a reduction in the fiscal deficit,” he told Reuters in his office in the presidential palace, sitting behind a wooden desk with photos of his family on it.

The government of Varela, who took office last year, has vowed to cut the deficit to 0.5 percent of GDP by 2019.

Panama's gross domestic product grew by 6.2 percent in 2014, the slowest rate in four years, and down from an 8.4 percent expansion in 2013. The economy grew by 5.8 percent in Panama in the first month of this year.

Varela said he expected growth of 6 percent in 2015.

Speaking two days before leaders from the Americas including U.S. President Barack Obama and Cuban leader Raul Castro gather in Panama City for a regional summit, Varela said he hoped his country would be a fitting host for the historic event.

Panama's economy has cooled after a blitz of infrastructure projects, including an expansion of the Panama Canal, which lifted growth rates into double digits in 2011 and 2012.

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