Panama economic activity 11 months in the red

Panama’s monthly index of economic activity (Imae) registered a 9.73%  contraction in  February the eleventh month of negative production while in the first two months of the year there is a fall of 12.2%.

In 2020, as a result of the strict restrictions imposed by the Government to contain the spread of the coronavirus, activity levels fell significantly.

Last year, the first full month with quarantine and business closure was April and the Imae for that month reflected a 25.48% drop.

Since then, economic activity has not been able to shake off the red. As 2020 progressed and the restrictions became more flexible, especially in the last quarter of the year,  reports La Prensa the falls were moderating, but the measures adopted in January to contain the second wave of infections truncated the trend and deepened the downturn.

The sectors that had a negative performance are hotels and restaurants, construction, commerce, manufacturing industries, transportation, storage and communications, financial intermediation, real estate, business and rental activities, electricity, and water.

On the other hand, the export of copper ore and its concentrates, the tolls of the Panama Canal, telecommunications, the movement of containers in the port system, the production of milk and its derivatives, as well as private health services performed well.

Argote considers that the indicator for March 2021 should  begin to reflect an improvement compared to then

Thus, between March and April of this year, there should be a turning point and achange from red to black in the comparison of activity.

If the vaccination program is effective in controlling the pandemic and no new restrictions are imposed, the rest of the months of the year should improve performance in relation to the previous year.

Fitch Ratings, for example, projects growth of 9.5% this year, but it will not be until 2023 when the GDP level of 2019 will be reached, according to the agency’s calculations.

The National Council of Private Enterprise presented to the Executive this week a package of 47 initiatives: with 31 focused on the financial, energy, industrial, agricultural, tourism, and construction sectors.

Those proposals would imply an investment of $4 billion and the generation of 140,000 direct jobs and another 68,000 indirect ones.