Wednesday 20 October 2021

IMF Executive Board Approves US$2.7 billion Precautionary and Liquidity Line for Panama to Address COVID-19 Pandemic

Paying the bills

Latest

Costa Rica legalizes production of medicinal cannabis and hemp

QCOSTARICA - Legislators on Tuesday approved the bill that...

A moving 24 hours: 4.9 and 5.2 quakes hit Golfito and Jaco

QCOSTARICA - The Red Sismológica Nacional (RSN)  - National...

Massacre in Buenos Aires: American had for sale the farm where he was murdered

QCOSTARICA - Stephen Paul Sandusky, 61, the American assassinated...

CCSS reports applying 6,124,445 doses of vaccine against covid-19

QCOSTARICA - The teams of the Caja Costarricense de...

A photo speaks louder than a thousand words

Photo by Eugenio García / Facebook

Today’s Vehicle Restriction October 20: Plates ending in “5 & 6” CANNOT circulate

QCOSTARICA - For today, Wednesday, October 20, vehicles with...

Reduction of the 2022 Marchamo approved!

QCOSTARICA - Legislators approved this Tuesday the bill to...
Paying the bills

Share

Q24N – The Executive Board of the International Monetary Fund (IMF) approved on Tuesday, January 19, Panama’s request for a two-year arrangement under the Precautionary and Liquidity Line (PLL) USS$2.7 billion, which the authorities intend to treat as precautionary.

The PLL will serve as insurance against extreme external shocks stemming from the COVID-19 pandemic.

- Advertisement -

In 2020, Panama was severely affected by the global pandemic as containment measures significantly reduced economic activity, especially tourism. In addition, the country was hit by hurricane Eta and tropical storm Iota which curtailed a large part of the country’s agricultural production. As a result, output is estimated to have dropped by 9 percent, with the fiscal position deteriorating significantly amid revenue shortfalls and expenditure pressures.

While Panama is able to cover its external financing needs under present conditions, the arrangement provides insurance against downside risks. Policy priorities under the PLL include supporting an adequate level of spending on health and the social sectors during the pandemic, continuing strengthening further institutional policy frameworks, including financial integrity and data adequacy, and preparing the economy for the post-pandemic recovery.

The PLL was introduced in 2011 to meet more flexibly the liquidity needs of member countries with sound economic fundamentals and strong records of policy implementation but with some remaining vulnerabilities.

Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Chair, made the following statement:

“Panama’s sound macroeconomic policies have led to over three decades of dynamic growth. However, the impact of COVID-19 pandemic has caused a considerable deterioration in the country’s macroeconomic situation and outlook. The two-year arrangement under the Precautionary and Liquidity Line (PLL) for 500 percent of quota (SDR 1.884 billion) will help the authorities’ economic recovery efforts against the pandemic, address outstanding vulnerabilities, and boost market confidence.

“Panama qualifies under the PLL, as it performs strongly in three out of the five qualification areas (external, fiscal and monetary) and does not substantially underperform in the other two areas (financial and data). It also meets the criteria for exceptional access. The authorities intend to treat the PLL arrangement as precautionary.

- Advertisement -

“The authorities have resolutely implemented measures to contain the pandemic and mitigate its impact on the economy. These include a temporary relaxation of fiscal deficit limits under the Social and Fiscal Responsibility Law to support health and social-related expenditures, permitting banks to drawdown their accumulated dynamic provisioning to absorb credit losses, and loan restructurings for affected borrowers. They are committed to a gradual fiscal consolidation and recalibration of policy responses once the pandemic recedes.

The policy agenda during the PLL will focus on facilitating prompt exit from the FATF grey list, strengthening data adequacy and public financial management, as well as preparing the economy for the post-pandemic recovery.”

For information on COVID-related financing requests approved by the IMF Executive Board, please see a link to the IMF Financial Assistance Tracker: https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker

 

- Advertisement -
Paying the bills
Q24N
Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

Related Articles

Dos Pinos, three offshore, cooperative and transnational

QCOSTARICA (Costa Rica Noticias) Despite the fact that Dos Pinos, one...

Pandora Papers: How the fight against tax evasion is going

Q REPORTS - The Pandora Papers is the latest global media...

Subscribe to our stories

To be updated with all the latest news, offers and special announcements.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.