PANAMA CITY, Aug 11 (Reuters) - Panama's new government said on Monday that it may have to raise the country's fiscal deficit limit for 2014, blaming unfinanced debts run up by the previous administration and lower revenues from the Panama Canal.

Economy Minister Dulcidio de la Guardia told Congress $600 million of unfinanced debts from the previous government, lower tax take and reduced revenues from the canal could mean the deficit is higher than the 2.7 percent allowed by law.

"We've suspended all loan applications that do not have financing and are studying a public spending containment plan," he said. "If this isn't possible we will present a request to increase the fiscal deficit level for this year."

De La Guardia said that any spending cuts would be from areas that are not crucial to the functioning of the state.

President Juan Carlos Varela won May's election by taking credit for outgoing president and former ally Ricardo Martinelli's successful economic policies while promising cleaner government.

Under Martinelli's watch, Panama's gross domestic product (GDP) grew at an average rate of around 8.2 percent a year, one of the fastest in Latin America.

But recent data has shown a sharp economic slowdown. In May the country's economy grew 1.71 percent, the slowest pace since 2009, as major public works projects, including an expansion of the canal slowed or wrapped up.

(Reporting by Elida Moreno; Writing by Christine Murray; Editing by Shri Navaratnam)