Country Report Panama March 1998 Main report

Outlook for 1998-99: Administration press on with structural reform

Buoyed up by the re-affirmation of IMF support, in the extended fund facility (EFF) approved in December 1997, the president will press on with the second phase of the reform programme he initiated in 1995. Key items on the agenda include the reform of social security, the penal code and banking, and continuing privatisation (including electricity and water). Over time opposition to the administration's reforms has diminished but the president will face tough criticism on some aspects of the programme. Whatever the outcome of next May's vote, the structural reform which is now paying off -- in terms of stronger GDP growth and investment that is laying the basis for its maintenance -- is unlikely to be abandoned or amended by the next administration.

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