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World risk · Finance and markets

Moody's cuts Panama below investment grade

The test Between 3 Nov 2026 and 3 Nov 2027, Moody's lowers Panama's long-term sovereign rating below Baa3.

Not under way · Confidence: medium · Reviewed 3 Nov 2026 · Scores from 1 to 10

This page answers: What could happen, how it is scored, and who is exposed?

Using this page
  1. Read the two scores: Likelihood and Impact are kept apart.
  2. Check what is happening, each fact with its source.
  3. Use the calendar for the dates to watch.

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Likelihood
4Elevated steady this month
Impact
4Elevated steady this month
Breadth4
Depth2
Duration7
Hard to substitute4
Canada pointNot added0

Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.

Two separate scales from 1 to 10. Strature never multiplies or merges them.

What changed

Dated, newest first

  1. Moody's assigned provisional ratings to the Treasury bill and note programmes; the finance ministry said the sovereign rating stays at Baa3 [2]

Why it matters

Moody's still rates Panama Baa3, its lowest investment grade, with a negative outlook. Fitch already rates Panama below investment grade, so a Moody's cut would leave S&P alone holding it there. The deficit is narrowing, and Moody's names a restart of the closed copper mine as a support for revenue.

Why Likelihood 4 Pushes: the negative outlook; a Moody's analyst's reported doubt on 8 Sep 2026; debt indicators worse since 2023. Brakes in force: a narrowing deficit; the rating held on 19 Oct 2026. Two drivers with brakes holding.

Why Impact 4 Estimate (no sourced bond price move).

The other facts on file (4)
  • Moody's concluded a periodic review and kept Baa3 with a negative outlook; debt burden and affordability worse since 2023; debt expected to stabilise around 66-67% of GDP; a mine restart named as a possible positive [3] (30 May 2026)
  • Moody's sovereign vice-president Jaime Reusche said, as paraphrased, that the agency is questioning whether Panama should keep its investment grade, and that the timing of resolving the outlook is uncertain [1] (8 Sep 2026)
  • Non-financial public sector deficit 2.78% of GDP in Jan-Jul 2026 against 3.27% a year earlier; legal ceiling 3.5% in 2026 and 3.0% in 2027 [1] (9 Sep 2026)
  • Fitch has rated Panama BB+ since March 2024; S&P holds BBB- with a stable outlook [1] (9 Sep 2026)

Where it sits

Panama CanalPANAMACOSTA RICAPanama Canal11. Moody's cuts Panama below investment grade: Elevated impact · possible (placed at the country)1 Moody's cuts Panamabelow investment gradeElevated impact · possiblePANAMA LOSES MOODY'S GRADE0250 kmat 8°NMap data: Natural Earth (public domain).
Panama CanalPANAMACOSTA RICAPanama Canal11. Moody's cuts Panama below investment grade: Elevated impact · possible (placed at the country)1 Panama losesMoody's gradePANAMA LOSES MOODY'S GRADE0250 kmat 8°NMap data: Natural Earth (public domain).

How it spreads

Sample, no data on file. No cited flows by country on file for this risk.

If

Between 3 Nov 2026 and 3 Nov 2027, Moody's lowers Panama's long-term sovereign rating below Baa3.

Not under way

Channels 3 on the card

  1. CanadaNo Canadian loss sourced.
  2. Public debtTwo of three agencies would rate Panama below investment grade, repricing public debt of about 66-67% of GDP [1][3].
  3. FundingForeign holdings of Treasury bills and notes rose to US$1,312m by September 2026 [2]; that demand would face a lower rating.

Sectors 1

  • Government bonds

Countries 1

Who is exposed

No figure on file: Panama.

Sectors
Government bonds

Three scenarios and their signposts

  1. S1

    Outlook stabilised

    The deficit keeps to the falling ceiling and Moody's moves the outlook to stable.

  2. S2

    Long wait

    Moody's holds Baa3 negative while the mine decision slips; environmental groups contest the audit behind it [5].

  3. S3

    Cut

    Moody's lowers the rating to Ba1.

The signposts of each scenario
PathSignpost
S1Full-year 2026 deficit data in early 2027
S2No mine decision by end-2026
S3A deficit above the 2027 ceiling in mid-year data

No probability is given for the three paths.

Dates to watch

Calendar

The dates to watch

A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.

  1. Dec 2026 Ministerial recommendation on the closed copper mine due before the end of 2026 [4] Tentative · Outside event
  2. Jan 2027 The legal deficit ceiling falls to 3.0% of GDP for 2027 [1] Declared · Outside event
  3. 3 Nov 2027 End of the scored window [1] Declared · Strature date

    Remind me

Sign in, with alerts on, for an email 7 days and 1 day before.

SourceStrature world-risk card; the dates cite the sources below.
Exhibit R-3 · PANAMA · strature.net

The other side

The deficit is narrowing, and Moody's left the rating unchanged in May and again in October [1][2][3]. A mine restart would bring recurring revenue, in Moody's view [3].

Connected in Strature

Sources

5 sources, numbered as the text cites them

  1. Panama fiscal deficit, Moody's and investment grade 2026. The Rio Times · 9 Sep 2026 · News · confidence medium · retrieved 3 Nov 2026
  2. MEF: Moody's otorga grado de inversión a letras y notas del Tesoro de Panamá. Telemetro · 19 Oct 2026 · News · confidence medium · retrieved 3 Nov 2026
  3. Moody's mantiene calificación de Panamá en Baa3 con perspectiva negativa. La Estrella de Panamá · 30 May 2026 · News · confidence medium · retrieved 3 Nov 2026
  4. ¿Qué pasará con la mina Cobre Panamá? La definición llegará antes de fin de año. Revista EyN (EFE) · 14 Jul 2026 · News · confidence medium · retrieved 3 Nov 2026
  5. Ambientalistas denuncian invalidez de auditoría a mina cerrada en Panamá por incongruencia. ABC Color (EFE) · 29 Jul 2026 · News · confidence medium · retrieved 3 Nov 2026

Reviewed 3 Nov 2026 · version 1 · last change: first review · All risks