Wrong projections on the economic growth of Panama by the official authorities put at risk the ability of the State to develop investments in public and social work in the country.
Thus reacted some economists in the light of the increase of the general State budget for 2017 announced by President Juan Carlos Varela, based on which the Panamanian economy will grow 6 percent next year.
Recently, the Cabinet´s council approved the draft budget for the fiscal year 2017 for the sum of 21 thousand 670 million, with an increase of 1,544 million (7.7%) compared to that of the year 2016 which stood at 20 thousand 126 million dollars.
According to the official authorities, next year's budget is based on macroeconomic projections as is the estimate that the gross domestic product (GDP) will grow 6% next year, inflation will be at 1.1% and nominal GDP of Panama will reach 58,633 million dollars.
Projections that according to some experts shows a kind of inability in the prognosis of the local economy from the Ministry of Economy and Finance (MEF).
For economist Juan Jované, the country's economy is growing at 4.6%, and venturing ourselves to make a budget, thinking that next year we will grow by 6% is quite risky and shows lack of capacity of the authorities.
Jované said that with an economy that shows a low in its main pillars, as is the Colon Free Zone (ZLC) that fell in a 14%, the ports in 19%, as well as the agriculture and the industry sectors, it is almost unthinkable that the economy will grow (6%) to this rhythm in 2017.
The economist stressed that what is going to happen with these wrong projections is that revenues will not be generated, which are going to stay below the budgeted figures forcing the authorities to cut down on the public expenditure.
This is what must be done in order to comply with the Fiscal Responsibility Law, says the economist.
He pointed out that when that budget reduction is made, it is that the problem arises because there is usually the need to do it in the middle of the year, affecting investment in areas like education and health.
Mr. Jované added that the official authorities must plan the economy against the most likely scenario and, if the situation improves, move to a stage better.
He said that the authorities, at the time when making the 2017 budget, overlooked everything that is happening at the international level, which somehow affect investments in the country.
"There are many uncertainties in the international environment, not only because of the "brexit" (Britix exit of the European Union), but also because of what is happening in Europe, acts of terrorism, etc. "South America is in a critical situation and for that fact, one should be prudent when planning", says Jované.
He added that what all such situations cause is a foreign investments decrease, because people are not very fond of investing.
By his part, Olmedo Estrada, President of the Association of Economists of Panama said that the problem of those Governments is precisely a bad planning.
He added that not complying with the budget will affect all those mega works which the Government has planned such as lines 2 and 3 of the Metro, Techos de Esperanza, basic health, fourth bridge over the Canal, among others.
Meanwhile, Julio De La Lastra, former President of the National Council of the Private Sector (Conep), stressed that while it is certain that this increase of the budget is projected on the fact that the economy will grow in 6%, it takes a series of actions to meet it.
He added that this specifically entails the responsibility to boost sectors such as construction, logistics and tourism, which are also excellent generators of jobs.
De La Lastra stressed that there is no doubt that all these situations that have occurred such as the case “Waked” and the misnamed “Panama papers” could affect the growth of the economy.
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