Fitch affirms Panama

Fitch Ratings said it affirmed the Republic of Panama's long-term foreign- and local-currency issuer default ratings at BB+. The agency also affirmed the short-term foreign-currency issuer default rating of B and the country ceiling of BBB+.

The outlook is positive.

The affirmation reflects Fitch's view of the sovereign's resilience to withstand the international financial crisis, even though Panama will experience a cyclical downturn and downside risks are present, according to the agency.

Although both economic growth and the fiscal balance are expected to deteriorate in 2009, Panama's macroeconomic and structural strengths will continue to set it apart from BB peers, the agency said.

Higher savings and investment, partly due to the ongoing Canal widening project, should help Panama maintain stronger economic growth this year relative to the global slowdown in 2001/02, the agency noted.

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