NEW YORK, Nov 9 (Reuters) - Standard & Poor's revised up its sovereign credit rating outlook for Panama to positive from stable on Monday, citing solid growth prospects and an improving fiscal outlook, the firm said in a statement.

Panama is currently rated BB-plus by S&P as well as Fitch Ratings. Moody's Investors Service has a Ba1 rating. All three are one notch below investment grade status.

S&P positively cited the tax reforms in Panama that is expected to boost government revenues by about 0.75 percent of gross domestic product. For the first time, the reforms extend Panama's tax reach into the business activities of the Colon Free Zone, "a highly politically controversial issue" for Panama, the firm said.

"We expect that further fiscal consolidation, including effective implementation of recent changes to the tax structure and additional measures to enhance fiscal flexibility, combined with continued GDP growth could improve Panama's fiscal profile," S&P's statement said.

"The positive outlook implies that Panama could be the next sovereign in Latin America to obtain an investment-grade rating," S&P said.

The expansion of the Panama Canal and an improving international economic scenario should also help support the country's growth prospects, S&P said.

(Reporting by Daniel Bases and Caryn Trokie; editing by Jeffrey Benkoe)