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Economy / Panama

Goods Deficit To Remain Drag On Current Account

August 2012 | Economic Analysis

Despite Panama posting a smaller current account deficit in Q112 than Q111, we are only modestly revising down our forecast for the country's total 2012 external account shortfall, as we believe that increased demand for capital and consumer goods imports will see the goods trade deficit widen noticeably in coming quarters. While Panama's financial inflows will be more sufficient to fund this shortfall, we note that the country's reliance on short-term investment does introduce some risk to the stability of its balance of payments position should growth slow.

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