Moody's upgrades Panama

Moody's Investors Service said it upgraded Panama's government bond ratings to Baa3 from Ba1 in light of a significant improvement in the country's fiscal and debt positions and favorable prospects for further consolidation in the government accounts over the medium term.

"The anticipated positive impact of fiscal policy initiatives on government accounts and prospects for sustained economic growth are at the core of the upgrade," Moody's vice president Alessandra Alecci said in a statement.

The decision also took into consideration a favorable government debt profile with low refinancing risks as well as the financial impact of recent tax increases, the agency said.

These factors are deemed to be more than sufficient to compensate for potential risks posed by the financing of a large-scale infrastructure development program, the agency noted.

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