World Bank predicts Panama growth  at 6.5% this year

The World Bank predicts that Panama will grow 6.5% this year, which represents one of the highest growth rates for the region, and for 2023 and 2024, growth for Panama of 5% in both years.

The growth trend of the economy will continue in the coming years, after the strong contraction of 17.9% in 2020, as a result of the restrictions imposed by the Government to contain the pandemic. The drop was partially offset in 2021, with a growth of 15.3% caused by the lifting of restrictions and increased economic activity.

The Ministry of Economy and Finance of Panama estimates that this year it will be possible to recover the level of gross domestic product (GDP) prior to the pandemic. One of the Executive’s commitments to achieve this convergence is the activation of construction through projects awarded under the turnkey model, and with a repayment scheme of 50% halfway through the work and the remaining 50% upon completion.

Panama is recovering from the crisis caused by the pandemic, as is Latin America as a whole. After a 6.9% rebound in 2021, the region’s GDP is expected to grow 2.3% this year and an additional 2.2% in 2023.

Higher taxes
“These modest projections place regional growth among the lowest in the world at a time when the region faces great uncertainties, such as the possible appearance of new variants of the coronavirus, an increase in inflationary pressure and the war in Europe, which threatens the global recovery,” according to the World Bank.

The Washington-based agency calls for reforms to be put in place in favor of growth in infrastructure, education, and innovation, and for the most important investments to be financed through more efficient spending and higher tax revenues.