Panama’s 2012 Budget

MEF Presents 2012 Budget to National Assembly Committee

Tuesday, August 02 2011 @ 05:48 PM COT
Contributed by: Don Winner
Views: 48
Panama’s Minister of Economy and Finance Alberto Vallarino appeared before the Budget Committee of the National Assembly today for the initial discussion of the budget. Vallarino said the details of Bill No. 361, “dictates the General State Budget for fiscal year 2012,” which was originally set at the sum of $14.468 billion dollars, an increase of 10.3% when compared to the ‘amended budget’ for 2011, and 11.4% when compared against the ‘budget law’ for 2011. Vallarino said the budget is set against a conservative environment of real economic growth in Panama of 7.5% of the gross domestic product (GDP) next year. He also said the proposal complies with the deficit limit for fiscal 2012 of 2% of GDP, as indicated by the Fiscal Responsibility Act, according to a press release. Vallarino was accompanied by Deputy Economy Minister, Frank De Lima, and analysts from the Office of the National Budget.
PROJECT DETAILS – According to the draft 2012 budget law, they expect revenue for the central government of $8.239 billion and expenditures of $7.227 billion. For decentralized institutions projected revenues are $3.62 billion with expenses of $4.234 billion. Among these – the Social Security Fund is projected to receive $2.379 billion dollars in revenue. Meanwhile, public enterprises are projected to perceive revenues of $985 million and expenses of $825 million, while financial intermediaries are projected revenues of $2.182 billion and and similar number for current and investment expenditures. (La Prensa)

Editor’s Comment: An annual budget of $14.4 billion dollars is the largest in the history of the Republic of Panama. As the economy continues to grow and expand, the government of Panama is seeing more and more income (revenue, taxes, monies from all sources) and the administration of Ricardo Martinelli is hard at work, spending that money on all kinds of infrastructure projects, upgrades, improvements, and other new stuff. They are, in effect, pouring that money right back into the economy, stimulating even more growth. Panama has “fiscal responsibility” laws in place which put caps on how much the government can borrow and spend, as a percentage of the total GDP. And what’s more, Panama is paying off it’s debt and reducing the percentage of the budget that has to be used to service the existing debt (actually they cut it in half, down to 12% from 24% just a few years ago.) The economy in Panama just keeps chugging along. Hey – look – Panama actually has an annual budget. They are being fiscally responsible. Their debt rating is improving (up to investment grade for the first time). They are living within their means, paying their bills, and not getting in over their heads. As a result, unemployment is lower now than at any time in the last 45 years, and the economy is growing faster than any other in Latin America. Maybe the guys in Washington could learn a thing or two from little Panama..

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