Current Account Gap Covered...For Now

BMI View: Rampant domestic growth rates saw Panama's current account return to deficit much earlier than we had expected in 2010, prompting us to revise our 2010 current account shortfall estimate to 11.5% of GDP (from 4.7% previously). This gap should continue to be covered by healthly foreign capital inflows until 2012, but beyond then we do see risks emanating from a potential reversal in investor sentiment.

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