S&P Global Ratings has reaffirmed Panama’s sovereign credit rating at BBB- rating Panama with a stable outlook, the Ministry of Economy and Finance (MEF) announced Tuesday. The decision covers long-term foreign and local currency debt, with short-term ratings held at A-3.
The agency also maintained Panama’s transfer and convertibility assessment at AAA, signaling continued confidence in the country’s ability to service obligations. The announcement comes as Panama projects one of Latin America’s highest growth rates for 2026.
Growth Projections Behind the BBB- Rating Panama Decision
S&P expects Panama’s economy to expand by approximately 4.5 percent in 2026, outpacing most regional peers. From 2027 through 2029, growth should settle near 4 percent annually, driven by Canal operations, private construction, air transport, and tourism.
The stable outlook reflects anticipated deficit reduction in 2026 and 2027. S&P said these fiscal improvements will help stabilize debt burdens and interest costs over the medium term. The agency pointed to improved tax collection efficiency and spending rationalization as key factors.
Pension Reform and Debt Management Strengthen Position
S&P described the pension system overhaul approved in March 2025 as a first-order political and fiscal achievement. The reform, combined with the 2024 Fiscal Social Responsibility Law amendments, has helped Panama meet its fiscal targets.
Risk premiums have declined, allowing Panama to re-enter international markets in February 2026. The MEF said the rating confirmation validates its proactive liability management strategy, which aims to improve maturity profiles and reduce financing costs.
‘The ratification confirms that prudence and financial discipline yield results. With proactive debt management, we continue strengthening confidence in Panama, an essential condition to accelerate growth and generate well-paid jobs’ [Translated from Spanish]
Felipe Chapman, Minister of Economy and Finance, made the statement following the announcement.
What the Stable Outlook Signals for Investors
The BBB- rating keeps Panama in investment-grade territory, a status that lowers borrowing costs for both the government and private sector. A downgrade would have pushed the country into speculative territory, potentially triggering capital outflows.
S&P’s assessment highlights Panama’s resilience despite global economic uncertainty. The agency’s growth forecast places Panama ahead of many regional economies, supported by the Canal’s expanded capacity and a recovering tourism sector. The stable outlook suggests no rating changes are expected in the next 12 to 24 months barring unforeseen shocks.
Panama’s ability to maintain investment grade status while implementing structural reforms demonstrates institutional capacity that international investors closely monitor. The country’s dollarized economy and banking center position remain key strengths underpinning the rating.