Colombia fiscal risk grows, Panama Canal expansion turns nine.

BY LATINVEX STAFF

Latin America’s top three economies Brazil, Mexico and Argentina all saw improvements in their competitiveness, according to the latest competitiveness ranking from Swiss-based business school IMD.

The ranking looks at economic performance, government efficiency, business efficiency and infrastructure, using external hard data and the results of a home-grown survey of senior executives in 69 global economies, including seven Latin American countries.

Brazil moved up four spots to 58^th place. That marks a contrast with the previous three years when it saw declines.

While it saw a decline in government efficiency, Brazil improved in economic performance and business efficiency. Its infrastructure score remained the same.

Mexico also improved, moving up one spot to 55^th place. Its infrastructure improved, but Mexico saw declines in economic performance, government efficiency and business efficiency.

Argentina moved up four spots to 62^nd place. The country improved in business efficiency and infrastructure, remained the same in government efficiency and declines in economic performance.

Chile remains the most competitive among the seven Latin American countries included in the ranking, while Venezuela the least. Chile moved up two spots globally to 42^nd place, which means it ranks ahead of such European countries like Italy and Greece.

Meanwhile, Venezuela moved down two spots to 69^th place, the last place on the ranking.

In other results, Colombia moved up three spots to 54^th place, while Peru moved up three spots to 60^th place.

FITCH: COLOMBIA FISCAL RISK GROW

Colombia’s new Medium-Term Fiscal Framework (MTFF) highlights the continued deterioration in the country’s fiscal position and increases uncertainty about prospects for corrective measures, Fitch Ratings says.

“These factors were central to our revision of the Outlook on Colombia’s ‘BB+’ sovereign rating to Negative in March this year,” it said.

The MTFF published on 13 June raises the 2025 central government deficit target by 2pp, to 7.1% of GDP, with subsequent increases of 1.4pp for 2026 and 0.8pp in 2027, to 6.2% and 4.9%, respectively.

“The deficit-reduction plan in the MTFF relies on uncertain revenue measures, including unspecified tax reform, and backloaded spending cuts to be implemented by the next administration after elections next year, “ Fitch warns. “The MTFF is consistent with our view in March that ongoing revenue underperformance and the reluctance of President Gustavo Petro’s administration to sacrifice spending priorities means that it would struggle to meet fiscal targets. However, the slippage is greater than we anticipated in March, when we forecast a central government deficit of 6.2% of GDP.”

PANAMA CANAL EXPANSION TURNS NINE

The Panama Canal Authority (ACP) celebrated the ninth anniversary of the canal’s expansion on June 25^th.

“The expansion of the canal was not only the largest infrastructure project since the original waterway opened in 1914, but has also provided tangible benefits for both Panama and the world,” ACP said in a statement. “It has increased the waterway’s capacity, boosted national revenue, and solidified its role as a key platform for global trade. Additionally, it has enhanced Panama’s competitiveness and opened up new opportunities for economic growth, investment, and employment.”

Key Milestones Since the Expansion:

• In 2016, the first liquefied natural gas (LNG) ship transited the canal, opening new energy routes through the isthmus.
• In 2024, the canal welcomed the MSC Marie, the largest container ship to transit the waterway with a capacity of 17,640 TEU.
• In 2025, the expanded locks surpassed 25,000 total transits.

 

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