Panamanians will pay higher interest on bank loans

The unconstitutionality ruling by the Supreme Court of Justice (CSJ) on the contract with the mining company First Quantum Minerals will increase interest on Panamanians’ regular bank loans, due to the lowering of the country’s investment grade rating. would occur.

Economist Arturo Tapia Velarde explained that “if we lose investment grade, our country will pay much more to obtain resources.

Investors are now demanding 1.50% more premium on long-term bonds from the Republic of Panama.

That is, if in the next 5 years B/.10 billion had to be refinanced, this implies an additional cost for the country of B/.150 million annually,” explained Tapia Velarde.

“In addition to this direct blow to ordinary Panamanians, a second national economic imbalance would be registered, as the cost of living increases, because merchants will pass on the amount of the increase in their commercial bank loans to the final consumer,” added the economist.

Tapia stated that “Panamanians will continue to suffer, with a third parallel scenario, with little or no investment by the State in government services and works, since the national budget will have to be allocated mainly to the payment of high interest on the external debt. ”.

“Rarely does a country find itself at a crossroads as important and dangerous as Panama faces with the issue of mining. What is at stake is not whether we allow open pit mining or not; Rather, the issue lies in the repercussions for the country of breaking a legal contract with a foreign investor and everything that entails,” concluded economist Tapia.