Panamanian President Laurentino ‘Nito’ Cortizo’s comprehensive response to Covid-19 will boost his legislative and public support in the coming months.
However, sustained downward pressure on economic activity could present risks to social stability and policy formation in the medium-to-long term, particularly as unemployment heads higher and Covid-19 exposes economic and social disparities.
Fitch Solutions have revised Panama’s score in their Short-Term Political Risk Index (STPRI) to 66.4 out of 100, from 67.6 previously, to reflect higher unemployment and greater public pressure for the government to improve social services.
In the framework of the covid-19 health emergency, the United States announced that it will maintain restrictions on non-essential travel from Mexico until June 22.
The measure applies to non-essential trips are practically for those who carry a laser visa or identification of residents of the Mexican border, and for those who have a visitor visa; they do not affect US citizens living in Mexico or legal residents who cross the border to work.
The restrictions also do not affect commercial exchange, since Trump has made it clear that they will continue legitimate commercial trade while limiting those who seek to enter the country for non-essential purposes.
In its latest projections, the Congressional Budget Office (CBO) sees GDP capsizing 38% on an annualized basis in the second quarter with the 26 million more unemployed Americans than there were at the end of 2019.
The forecasts are roughly in line with Wall Street economists and slightly less dour than the most recent tracking number from the Atlanta Federal Reserve, which sees GDP falling about 42% in the April-to-June period.
If the collective outlook is anything close to accurate, it will represent the worst drop for a U.S. economy that was brought to a halt due to efforts to stem the coronavirus pandemic.
Oil prices rose on Wednesday amid signs of improving demand and a drawdown in U.S. crude inventories but worries over the economic fallout from the coronavirus pandemic capped gains.
Brent crude futures for July delivery were up 23 cents, or 0.7%, at $34.88 per barrel at 0347 GMT. U.S. West Texas Intermediate (WTI) crude futures for July were up 14 cents, or 0.4%, at $32.10 a barrel. The July contract closed on Tuesday at $31.96, up 1%.
Oil prices have mainly risen during the past three weeks, with both benchmarks climbing above $30 for the first time in more than a month on Monday, supported by massive output cuts by major oil producing countries and signs of improving demand.
The Jamaica Stock Exchange reported unaudited net profits of $125.14Mn (EPS:18¢) for the three months ended March 31, 2020, which represents a marginal increase of 1.2% (or $10.37Mn) from the $123.60Mn (EPS:18¢) that was made in the same period of the previous year.
This outturn can be explained by the 14.3% (or $63.47Mn) increase in revenue as well as a 496.4% (or $5.50Mn) increase in investment income, which outstripped the 21.1% (or $55.18Mn) increase in total expenses.
Since the start of the year, JSE stock price has fallen 23.9%, closing Tuesday’s trading session at $20.98. At this price, the company trades at a P/E of 28.4x earnings, which is above the Main Market Financial Sector Average of 14.2x.
Pertaining to the protocols, the Prime Minister informed that the Minister of Tourism, Hon. Edmund Bartlett, has been working with the industry to establish the necessary protocols.
“We have to be timing [it] very carefully, because other countries are going to reopen and people are going to travel, and Jamaica must be the number-one destination for travel — that is how we recover stronger from crisis,” Mr. Holness added.
“All of our stakeholders, the hoteliers, the airlines, the travel agencies and the attractions, we have established probably one of the strongest teams ever assembled for the business of building the tourism fabric in our country. We are satisfied that within a short period of time and in consultation with all the stakeholders and partners… we will be able to announce a specific date that we will begin opening the tourism industry,” he said.
The Panamanian economy, one of the fastest growing in Latin America, will contract at least 2% in 2020, impacted by the crisis unleashed by the coronavirus.
The authority explained that, after more than a decade ranking among the best performing countries in the continent, Panama will have negative growth due to the stoppage of most activities to stop the spread of the virus.
Earlier this year, before the health crisis unleashed, the Ministry of Economy and Finance had forecast that GDP would grow around 4.5% - higher than 3% last year - driven by the activities of a huge copper mine, which had to be temporarily closed due to the outbreak.
Fitch Ratings has downgraded Costa Rica's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B' from 'B+'. The Outlook is Negative.
The downgrade of Costa Rica's Long-Term Foreign-Currency (LT FC) IDR to 'B' reflects increased risks of near-term financing stress due to widening fiscal deficits, a steep amortization schedule and borrowing constraints, against a background of economic contraction caused by the effects of the coronavirus pandemic.
The Negative Outlook reflects further downside risks to debt sustainability amid uncertain prospects for post-crisis fiscal consolidation, economic growth and borrowing costs.
Fitch expects Costa Rica's economy will contract by 4% in 2020, with risks tilted to the downside. Containment measures will lead to a sharp contraction in households' and firms' disposable income, which will affect domestic demand and unemployment.
The United States on Tuesday reported a record $738 billion budget deficit in April as an explosion in government spending and a shrinking of revenues amid the novel coronavirus pandemic pushed it deeply into the red.
The Treasury Department said the budget deficit in April was the first to reflect the enormity of government spending that has been authorized to try to mitigate the economic impact of the crisis. The previous record budget deficit for any month was $235 billion in February 2020.
The fiscal year-to-date deficit surged to $1.48 trillion compared to a $531 billion deficit in the comparable period in 2019, blasting past the previous monthly deficit record of $870 billion in April 2011.
Britain’s economy shrank by a record 5.8% in March as the coronavirus crisis escalated and the government shut down much of the country, according to official data that point towards an even bigger hit to come.
In the first three months of the year, GDP contracted by 2.0% from the last three months of 2019, the biggest drop since the depths of the financial crisis in late 2008, the Office for National Statistics said.
The Bank of England said last week that the contraction of the economy in the April-June period could approach 25% and lead to the largest annual decline in more than three centuries.
