Fitch pares Panama

Fitch Ratings said it downgraded Panama’s long-term foreign-currency issuer default rating to BBB- from BBB.

“Panama’s downgrade to BBB- reflects the severe weakening of public finances due to the economic disruption caused by the coronavirus pandemic, which has exacerbated underlying weakening fiscal trends predating 2020. The unprecedented GDP contraction and government revenue loss has prompted a material rise in public debt. A low and falling revenue to GDP ratio signals limited fiscal space to respond to economic shocks,” Fitch said in a press release.

The outlook is negative.

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