Minister of Economy anticipates that fall in income will continue the rest of the year
The fall in income recorded by the Central Government in the first half of the year as a result of the new coronavirus pandemic will continue until the end of the year. This was predicted by the Minister of Economy and Finance, Héctor Alexander, during his participation this Tuesday, July 21 at the Annual Executive Conference - CADE 2020.
The head of the Ministry of Economy and Finance (MEF) acknowledged that the financial strategy has been greatly affected by the drop in current income. In the first half of the year, Central Government revenues totaled $2.23 billion, a figure that represents a drop of $1.38 billion, or 38.4% compared to what the Government had budgeted.
The minister announced that for the second half of the year they expect this trend to continue.
Every month we are going to have revenues far below the estimates that had been made. This will be felt in 2021 and later, said the minister.
Due to the lower amount of income, the Government has had to resort to reallocating part of the budget towards the new priorities of containing the pandemic from the health point of view and providing resources to the Panama Solidarity plan.
In addition, it has resorted to contracting debt, with a plan that contemplates raising funds from abroad to cover the budget, generate liquidity in the financial system, carry out a public investment plan, continue with the payment of subsidies, which generates an annual income of $1.6 billion, as well as programs to support the construction of houses and micro, small and medium-sized enterprises (SMEs) and the agricultural sector.
Several of the panelists on the second day of CADE 2020 conferences agreed on the importance of promoting structural changes in Panama's economy.
The economist Guillermo Chapman pointed to a government reform, to have a more agile and effective state apparatus; a labor reform that reduces the rigidities that currently exist; a comprehensive policy that seeks to improve social services; and seek income generation from the promotion of new sectors of the economy.
The minister announced that for the second half of the year they expect this trend to continue.
Every month we are going to have revenues far below the estimates that had been made. This will be felt in 2021 and later, said the minister.
Due to the lower amount of income, the Government has had to resort to reallocating part of the budget towards the new priorities of containing the pandemic from the health point of view and providing resources to the Panama Solidarity plan.
In addition, it has resorted to contracting debt, with a plan that contemplates raising funds from abroad to cover the budget, generate liquidity in the financial system, carry out a public investment plan, continue with the payment of subsidies, which generates an annual income of $1.6 billion, as well as programs to support the construction of houses and micro, small and medium-sized enterprises (SMEs) and the agricultural sector.
Several of the panelists on the second day of CADE 2020 conferences agreed on the importance of promoting structural changes in Panama's economy.
The economist Guillermo Chapman pointed to a government reform, to have a more agile and effective state apparatus; a labor reform that reduces the rigidities that currently exist; a comprehensive policy that seeks to improve social services; and seek income generation from the promotion of new sectors of the economy.