Estrada: The government is putting financial pressure on the country

He Cabinet Council totested the issuance of one or more government securities and their placement on the local capital market in the amount of 1,600 million dollars for partial financing of resource needs State budget for fiscal year 2023 and other fiscal periods.

For him professor i economistOlmedo Estrada This means greater indebtedness of the country through the state, since it does not have the necessary funds to fulfill the state budget, which is reflected in the lack of income.

It is easier for the government to put the country in debt and have to pay future generations with restrictions, the economist repeated.

He added that the Government failed to implement fiscal discipline, the main part of which is the restraint of public spending. “The more the state is in debt, the more interest we have to pay, and therefore we will have less financial resources for the next 10 to 15 years,” said the economist.

“The government is getting tighter and tighter financially, and this will reduce the means to meet the future needs of the population,” he added.

The debt accrued by the current administration does not bode well for the government that takes office in 2024, Estrada says.

“To receive a government in charge is not flattering for a new government that will not have the resources to create strategies and will not have the capacity to solve national problems”said a professor at the University of Panama.

capital market
These funds will be used to partially cover the financial needs of General state budget for the fiscal period 2023 and other fiscal periods, with the payment of costs and expenses related to emissions and/or actions approved by this Government Regulation.

The state uses as a mechanism of comparison through bookbuilding, multiple auctions, direct placements, exchange operations or any other placement mechanism that the state deems appropriate and which is in accordance with the prevailing market practice in this type of transaction.

It also has a term of 15 years with interest calculated annually on the basis of 30/360 and paid semi-annually.

One payment at maturity or in several capital amortizations, as determined in the final terms.

He Ministry of Economy and Finance (MPEG) announced that in the frame Financing strategy 2023, entered the local market on July 18, 2023 with the issuance of a new tradable international sovereign bond, through Euroclear, with a maturity of 2033 and a coupon of 6.375%, totaling $700 million.

The financing needs of the 2023 budget are estimated at USD 4,153 million. This operation finances approximately 78% of the stated needs, and continues to promote and develop the growth of the local capital market.

Offers have come in for this new one treasury bond, with more than 100 investor accounts from Asia, Europe, North America and Latin America. Domestic investors received a share of about 40% of the issued amount, while the rest was allocated to international investors.