Panama's strong growth drives down unemployment
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Page 124
Panama maintained strong economic growth and low inflation in recent years, which helped to lower unemployment, and made progress in reducing extreme poverty, the IMF said in its annual economic review. However, growth is expected to slow in 2005 as activity in the construction and export-oriented service sectors decelerates slightly. The IMF Executive Board commended the authorities for their achievements and encouraged them to continue developing a well-targeted program to reduce rural poverty and achieve the Millennium Development Goals.
When Panama's nonfinancial public sector deficit increased slightly in 2004, the new administration took revenue and expenditure measures to contain the deficit. The Board concurred that reducing the fiscal deficit and improving public debt dynamics are key to sustaining economic growth and lowering poverty. The authorities' fiscal commitment is reflected in the budget for 2005 and the recently adopted fiscal reform. The main challenges are strengthening government finances and restoring the long-term viability of the public pension system, while enhancing the competitiveness of the private sector.
Panama remains focused on concluding free trade...
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