Fitch revises Panama view to stable

Fitch Ratings said it affirmed Panama's long-term foreign-currency issuer default rating at BBB- and revised the outlook to stable from negative. The agency also affirmed Panama's long-term local currency IDR at BBB- revised the outlook to stable from negative and then withdrew the rating.

Fitch said it withdrew the rating because Panama’s economy is fully dollarized, and it would consider default on its dollarized debt as a default on the sovereign's FC IDR.

“The revision of Panama's outlook to stable reflects the ongoing improvement in the fiscal position and a better-than-expected economic recovery following the initial pandemic shock. Fitch's fiscal expectations have improved amid a stronger-than-expected 2021 outturn and economic recovery, and improved confidence in the authorities' capacity to successfully narrow the fiscal deficit via revenue-based measures and expenditure restraint,” the agency said in a press release.

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