1. NS4540 Winter Term 2018 Panama: Outlook 2018
Oxford Analytica,Cuba: Economic Woes to Mark Succession Preparation December 13, 2017

2. Outlook I
Juan Carlos Varela of the PP will see his governability weaken as he nears the end of his term in July 2019
Low popularity within the legislature and among voters will move him to focus more on foreign policy in 2018
The 2019 presidential campaign will be a three-way race but the PP is unlikely to win another term.
Candidates who present themselves as outsiders will garner the most support in line with other elections in the region
Economic strategy will remain focused on
Strengthening Panama’s role as a global transport hub and
Promoting FDI iin the logistics and transport sectors

3. Outlook II
Toll income from the expanded Panama Canal will increase fiscal revenue
However higher social spending will force the government to tap its sovereign wealth fund to achieve fiscal balance in 2018
Infrastructure projects and global economic growth will support GDP growth averaging 5.7% in
The current account deficit will average 4.6% of GDP, but will be more than covered by FDI inflows

5. Forecast Risks
High crime rates constrain business opportunity and add to business costs
Probability high, impact moderate, intensity = 12
The government seeks to increase employers’ social security contributions
Despite a softening labor market companies’ ability to find qualified workers remains hampered
Probability moderate, impact high, intensity = 12
Foreign businesses face discriminatory taxes as government attempts to boost revenue
Organized criminal activity threatens governability
Risk intensity is product of probability and impact on a 25 point scale