What Happened
Panama’s public debt balance has exceeded $60 billion, the Ministry of Economy and Finance (MEF) reported, following a combination of liability-management operations and new financing needs. Between January and February 2026 the debt rose by about $300.4 million.
The MEF says the increase does not reflect only newly issued debt but an active management of the state’s liabilities. During the period the government reduced the outstanding balance of global bonds by roughly $200 million through operations intended to lower interest costs. At the same time, the country received a $500 million disbursement from a multilateral institution, producing a net increase in the total debt of close to $300 million.
Background
The ministry frames these moves as part of an integrated strategy to organize public finances, reduce the fiscal deficit and achieve primary surpluses over the medium term. The stated objective is to slow the pace of debt growth and stabilize the debt stock toward the end of the decade.
MEF communications — including a post on the ministry’s Twitter account — also note that current indebtedness partly reflects obligations accumulated under previous administrations and unforeseen commitments that continue to pressure state finances.
Historical balances cited by the MEF show a long upward trend: when Martín Torrijos left office in 2009 the public debt stood at $10,800 million; by the close of Ricardo Martinelli’s administration in 2014 it had risen to $17,639 million; under Juan Carlos Varela in 2019 it reached $26,612 million. The largest single jump occurred during Laurentino Cortizo’s administration, which ended in June 2024 with a debt of $51,812 million — an increase of more than $25 billion between 2019 and 2024 attributed to that period.
What This Means
Economist Ernesto Bazán warns the fundamental problem is structural: persistent fiscal deficits that force the state to borrow to cover spending that exceeds revenues. Bazán argues that 2025 did not represent a true containment of spending but rather a postponement of commitments into 2026, a tactic that deepens rather than solves fiscal pressure.
He also highlights the practice of settling obligations to suppliers with debt instruments — a short-term liquidity relief that raises total indebtedness. Bazán warns that the ultimate burden falls on citizens: higher interest costs or the need to service larger debt may force future adjustments in public spending on services such as health, education and transport, or lead to higher taxes to meet obligations.
For now, the MEF emphasizes liability management and multilateral financing as tools to lower interest costs and buy time to pursue fiscal consolidation, while analysts stress that structural reforms will be required to alter the long-term debt trajectory.