Panama growth slowed  but rebound forecast

As Panama’s outgoing administration prepares to hand over the reins to President-elect Cortizo a report from the Comptroller’s Statistics and Census o revealed that in the first quarter of the year the real gross domestic product (GDP) was 3.1%., down from 4% in the last two quarters of 2018.

The GDP is an indicator that measures the added value of the products and services generated in the country. To eliminate the distorting effect that inflation could generate, prices are brought to a constant value (in this case to the value of 2007).

After having registered a rebound in the last two quarters of 2018 following  the construction strike in  April and May, the period January-March 2019 shows a slower growth of activity

The sector that grew most in the quarter was the supply of electricity, gas, and water, with a rate of 5.6%, explained by a thermal generation that increased by 161%.

Financial intermediation grew by 4.7% due to the performance of the international banking center, which recorded a growth of 4.3% with an increase in the portfolio of internal loans to the private sector, especially the mortgage portfolio and personal consumption. In addition, the activity of insurance companies reported an increase of 8.2%, due to the increase in net premiums.

The transport, storage and communications group recorded an increase of 4.3%.

The transport, storage and communications group recorded an increase of 4.3%.

Construction grew 4.5% due to public and private infrastructure works, mainly roads, ports, mining and natural gas projects, among others, said the entity of the Comptroller General of the Republic.

Real estate activity grew 3% due to the sale of homes built in previous periods.

Canal Operations
The operations of the Panama Canal reported an increase of 6.3%, as a result of higher revenues from tolls and the services provided by the Canal to the ships. In addition, the port system increased its added value by 4.2% due to the greater movement of containers (3.8%), general cargo (51.9%) and bulk cargo (3.2%).

On the negative side, the weak performance of manufacturing industries stand out (with a fall of -0.9% with respect to the same period of 2018); community activity, where the performance of games of chance and casinos (-2.6%) and fishing, which records a fall of 39.9%, is computed.

The Ministry of Economy and Finance (MEF) prepared the general budget of the State for this 2019 based on a projection of economic growth of 5.9%. As expectations have not been met, the MEF lowered the projection to 5.3%.

 A  rebound is expected,  in the second half of the year with  as there will be more activity in large-scale works such as the construction of the fourth bridge over the Panama Canal, the expansion of the Inter-American Highway between the Bridge of the Americas and San Carlos, the start of the export of the Donoso copper mine  the construction of the new children’s hospital. and the greater capacity for air transport of the Tocumen international airport. 

–