Fitch affirms Panama

Fitch Ratings said it affirmed the Republic of Panama's long-term foreign currency and local currency issuer default ratings of BB+ and simultaneously revised the outlook to positive from stable.

Fitch said it has also affirmed the short-term foreign currency issuer default rating of B and the country ceiling of BBB+.

The revision of Panama's outlook to positive reflects the virtuous circle of growth momentum and fiscal consolidation, which has put Panama's public and external debt indicators on a downward path, the agency noted.

As such, Fitch said it believes that Panama should be able to absorb future increases in public debt related to the expansion of the canal without precipitating downward pressure on the ratings given its solid economic growth prospects and the expectation that fiscal discipline will be maintained.

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