Panamanians increasingly defaulting on loans

Even uncle George thinks we're screwed

A bit overlooked by the rest of the media, but La Prensa reported last week that Panamanians are increasingly defaulting on loan payments.

According to a report by Equilibrium, which is affiliated with Moody's, quoted by the paper, the default rate has gone up from 2.7% in 2006 to 3.1% this year. In absolute numbers, the amount of the loans in default has almost doubled since 2005: From $575 million to $971 million.

In Panama, local credit represents 93% of GDP, one of the highest rates in Latin America.

La Prensa says that there is nothing to worry about, but Panamanians themselves are not so sure. Earlier this week, a poll revealed that the vast majority believes that the economy is the same or worse than a year ago, and they are similarly pessimistic about the future. That suggests that there also is little optimism about the ability to make loan payments.

So what does this mean, you ask? Probably that we're all doomed. But we knew that already since the nutty right-wingers keep saying things are just swell in Bananama - always a sign of big trouble ahead.