Panama Makes High-Grade Hat Trick

Moody’s is the third ratings agency to upgrade Panama to investment grade, changing the sovereign’s rating to Baa3 (stable) from Ba1. Moody’s cites a significant improvement in Panama’s fiscal and debt positions. “The anticipated positive impact of fiscal policy initiatives on government accounts and prospects for sustained economic growth are at the core of the upgrade,” says vice president and senior analyst Alessandra Alecci. “The Panama Canal expansion and an ambitious infrastructure investment program are likely to support strong economic growth in the next few years, boding well for debt dynamics.” Fitch upgraded Panama to IG in March and S&P did so in late May.