Stimulus plan for Panama’s economy

President Martin Torrijos said that the Financial Stimulus Program will be executed according to what the Advisory Board recommends. The names of its members will be announced soon.

The president pointed out that although the world is in the midst of a financial crisis, the Panamanian economy is stable and has one of the highest level of growth in Latin America and the stimulus program is being adopted as way to ensure that the world’s financial crisis will not severely affect tthe country.

The government program aims to stimulate the banking credit system to benefit workers and private companies, because they are the engines of the national economy, which maintain the good rhythm of the growth of the country, with the creation of jobs and the commercial activity of the last few years.

The $1.1 billion fund came from the Andean Development Corporation, the Interamerican Development Bank and the National Bank of Panama. Torrijos said that the plan will not affect the public debt, because “we have made a great effort to reduce it.”

Torrijos added that this is not a subsidy program or a rescue plan, but it is action that will benefit Panamanians in the long run; those who would like to buy a home, modernize a micro-enterprise or expand their businesses.

The Stimulus Financial Program will be administered by the National Bank of Panama and will operate in such a way that the government will have a reasonable return, that will cover the operative expenses of the plan and will apply the necessary controls through the Bank Superintendent.

Observers believe that the stimulus program is a way for Torrijos to cover the first signs of economic slowdown in Panama that are beginning to show with the bursting of the real estate bubble.

Others think that the money will be used to pay for deficit in mega-projects such as the Coastal Strip and other government projects that have tobe finished before the Torrijos administration is over.