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Panama Expenditures
In the 1950s and most of the 1960s, the expansion of revenue
sources and the growing economy permitted an increase in government
expenditures. Spending remained concentrated on the canal, and only
a small share went to agriculture, industry, or commerce.
Government investments were not large, but revenues financed only
a part of them, thereby requiring a substantial increase in the
public debt to fund the remainder. Expanding private investment was
achieved through a high rate of private savings in spite of a
considerable increase in per capita private consumption in the
terminal cities.
In the 1970s, government current expenditures expanded
dramatically. Most of that increase was a result of the rise in
interest payments on the public debt from 2 percent to 6 percent of
GDP. In 1979 expenditures totalled US$554 million, most of which
covered administrative costs (52.4 percent) and interest payments
(23.6 percent). By 1985 expenditures had risen substantially to
US$1.4 billion, but the actual structure of government expenditures
changed very little; administrative costs accounted for 56 percent
of the budget, followed by interest payments at 32.3 percent.
Between 1972 and 1983, the share of total expenditures fell in
the categories of education (from 20.7 percent to 11.0 percent),
health (15.1 percent to 13.1 percent), and economic services (24.2
percent to 13.5 percent). The share of expenditures allocated for
housing, amenities, social security, and welfare rose during the
same period from 10.8 percent to 12.2 percent. The biggest
increase, however, was in the "other" category, which rose from
29.1 percent to 50.2 percent, mostly because of a larger debt
service share (including interest payments and amortization).
Data as of December 1987
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