Panama election results

Despite fiscal challenges, Mulino’s administration plans a pro-business spending push amid economic slowdown, offering potential opportunities for firms

Despite complex internal politics, firms should note that there are measures that the executive can advance without legislative support, particularly those that favor investment, which are part of President-elect José Mulino’s extensive plan for economic revival. As Mulino has historically supported pro-business policies, we anticipate that his government will pursue several initiatives favorable to the private sector, such as infrastructure investment through public-private partnerships, fostering competition in electricity sector commercialization, and various pro-investment stances like the potential reopening of the controversial copper mine. However, until the revenues from the mine, which represented approximately 5% of the GDP, are replaced, and as long as the drought in the Panama Canal continues, firms should prepare for the slowdown in one of the fastest-growing emerging economies in recent decades and prepare for a slowing appetite for consumption and investment.


José Raúl Mulino, from the “Alianza Salvar a Panamá” party and former running mate of Ricardo Martinelli, won the Panamanian presidency with 34.99% of the votes, surpassing Ricardo Lombana from the “Movimiento Otro Camino” by nearly 10 percentage points. After an intense period of presidential campaigns in Panama, the Supreme Court validated his candidacy just three days before the election. His victory is based on the promise to revive the economic boom of the Martinelli era, attracting voters willing to overlook the controversies of the former president. Poised to take office on July 1, Mulino will serve until June 30, 2029. His tenure is expected to confront significant economic and political hurdles that will demand the implementation of substantial reforms to promote stability and growth in Panama.

Recovering macroeconomic stability is Mulino’s main priority in the face of Panama’s economic challenges. Laurentino Cortizo’s previous presidency, marked by its unpopularity and social protests, saw a stagnation in numerous policies, which hindered significant advancements. A clear example was the closure of the First Quantum Minerals copper mine, crucial for fiscal revenues and exports. This closure resulted in a downgrade of the credit rating by Fitch, with S&P and Moody’s likely to follow. The situation is exacerbated by the drought affecting maritime traffic through the Panama Canal, further decreasing the country’s fiscal revenues.

President-elect Mulino plans to implement several measures to reactivate growth and macroeconomic stability. He has stated that he considers reopening the copper mine as essential to restoring investor confidence, although this move could affect his popularity and trigger new social protests. Additionally, Mulino plans to reform the social security fund to ensure Panama’s financial sustainability. His government also proposes an ambitious infrastructure plan, which includes increasing spending on road construction, vital for job creation. Among other significant initiatives, there is the implementation of a Unified Law for Purchasing Medications, aiming to standardize prices and ensure availability, and efforts to strengthen national security, with a focus on curbing the migration flow through the Darien, which the president links to an increase in crime.

Our View

Mulino will take office facing significant challenges, including a complex fiscal situation and the expectation to fulfill the former Martinelli government’s promises to pursue prosperity. Despite these challenges, it is likely that he will push for tax and pension reforms to enhance fiscal revenues and social security contributions. However, given the tense social atmosphere and expected economic slowdown, his capacity to enact these reforms may be limited. Acknowledging these hurdles, Mulino has emphasized the need for dialogue with all political forces to form a national unity government. Following recent parliamentary elections, where no party secured a decisive majority, the legislative landscape suggests that forming coalitions will be necessary for reforms.

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