IMF国际货币组织全球-Panama_Selected-Issues_88页_1mb

Summary of the Panama IMF Report (April 2020)

Core Content

This report provides an analysis of key economic, fiscal, financial, and social issues in Panama, focusing on the challenges and policy options for sustainable development and macroeconomic stability. It is part of the International Monetary Fund's (IMF) periodic consultation with Panama, based on data up to March 9, 2020.

Fiscal Policy in Panama

A. Background

• Fiscal policy is the primary tool for economic management in Panama due to its dollarized economy, open capital account, and lack of monetary policy independence.
• The Social Fiscal Responsibility Law (SFRL) imposes a debt-to-GDP ratio target of 40% and a non-financial public sector (NFPS) deficit ceiling.
• The rule has supported fiscal discipline and kept debt at historically low levels but can lead to unintended pro-cyclicality during economic downturns.

B. Revenue Measures

• Tax revenue in Panama averaged 91.5% of GDP from 2014 to 2018, significantly lower than regional averages (15% for Central America, 17.5% for Latin America).
• Tax expenditure was 3.6% of GDP in 2016, about one-third of total tax revenue, higher than the regional average of 25%.
• VAT revenue is among the lowest in Latin America (2.5% of GDP), due to low rates, many exemptions, and evasion.
• Corporate tax rates are on par with LAC and advanced economies, but lower than Singapore.
• Environmental taxes can be increased to support climate commitments and generate additional revenue.

C. Expenditure Measures

• Current primary spending accounted for 66% of total expenditure in 2018, driven by wages and transfers.
• Education spending is inefficient compared to regional peers.
• Social spending often fails to target the most vulnerable populations.
• Public-private partnerships (PPPs) are proposed as a means to access private financing, but require transparent processes and effective monitoring.

D. Strengthening the Fiscal Framework

• The SFRL needs to be reinforced to reduce pro-cyclicality and enhance fiscal resilience.
• Fiscal buffers could be created under a shadow fiscal rule to allow for fiscal stimulus during downturns while maintaining debt sustainability.
• Fiscal reporting is hampered by turnkey projects and limited institutional coverage, which delay expenditure recognition and reduce transparency.
• Fiscal risk management is critical, with risks including unfunded pensions, contingent liabilities, and extreme weather events.

E. Concluding Remarks

• Panama is at a crossroads between advancing to an advanced economy or stagnating in the middle-income trap.
• Fiscal policy plays a central role in public service delivery and investment.
• The new administration has an opportunity to implement reforms to improve fiscal sustainability and economic performance.

Key Policy Recommendations

• Upgrade tax and customs administration to improve revenue collection and compliance.
• Strengthen fiscal buffers through a shadow fiscal rule.
• Appoint members of the Fiscal Council and provide adequate resources.
• Review and phase out turnkey contracts and adopt international accounting standards.
• Undertake a cost-benefit analysis of tax incentives and exemptions.
• Review tax rates, especially VAT and environmental taxes.
• Improve the efficiency of public spending, particularly in education and social programs.
• Reform the public pension system and prepare fiscal risk reports.
• Strengthen accountability and enforcement mechanisms for the SFRL.

Financial Sector and Macroprudential Policy

• Macroprudential measures are essential to mitigate housing risks, especially with rising household debt and mortgage lending.
• LTV and DSTI ratios are limited, and regulatory frameworks need enhancement.
• Financial stability oversight and bank resolution mechanisms should be improved.
• Monitoring of housing prices and construction activity is crucial for early warning of real estate overheating.

Structural Policies

• Productivity growth is slowing, despite high investment.
• Infrastructure upgrades are needed to support economic growth.
• Human capital development and skilled labor availability are critical for innovation and competitiveness.
• Competitiveness indicators suggest room for improvement in economic and social performance.

Social Issues

• Poverty in indigenous territories is higher than the rest of the country.
• Gender inequality persists, with limited economic and social opportunities for women.
• Environmental challenges such as freshwater scarcity need attention.
• Social support programs should be more targeted to improve outcomes.

References

• The report cites various sources, including IMF staff calculations, national authorities, and international databases.

Figures and Tables

• Figure 1 shows the impact of higher deficits on public debt.
• Figure 2 presents the composition of tax revenue and expenditure.
• Figure 3 highlights the low efficiency of education spending.
• Table 1 compares tax expenditure across countries.
• Table 2 shows mineral taxation features among leading copper producers.

This report outlines a comprehensive roadmap for Panama to enhance fiscal sustainability, improve public service delivery, and achieve long-term economic growth.