Mining protests fallout could shrink GDP 1.6%

Panama’s Gross Domestic Product (GDP) could close the year, with a reduction in its growth between 1.2% and 1.6%, as a consequence of protests and street closures, against the mining contract that lasted more than 30 days.

The estimates have emerged as part of what was indicated by private sector unions, who estimated daily losses of $90 million, that is, more than $2 billion in activities such as tourism, transportation, agriculture, and logistics between October and last November.

The economist Even Chi Prado, who is also a market behavior analyst and financier, predicted a possible reduction in GDP of 1.6% (almost $2 billion), according to the estimates of the Ministry of Economy and Finance (MEF). ) which until last September were 6%.Chi stated that Panama’s Quarterly Gross Domestic Product (GDP) experienced a growth of 8.8%, and the GDP may end up at 5.5%.“The economic impact of the crisis will affect the closing of 2023, since if in the first semester it closed at 8.8%, with the economic impact, it can be estimated at 5.5%,” stressed the financier.

Chi’s estimate coincides with that of the dean of the Faculty of Economics of the University of Panama, Rolando Gordón since he estimates that the 2023 GDP will close in the order of 4% to 4.5% with a drop between 1.2% to 1.5%.

“The protests that strongly affected production, especially national production, have resulted in GDP growth going from 6% or 6.5% to 4.2% or 4.5%, after a fall of 1.2%. % to 1.5%,” said Gordon.

The figures, according to economists consulted, would change the growth prospects that the Government and international organizations had. Three months ago, the Minister of Economy and Finance, Héctor Alexander, announced that GDP growth this year would be at least 6%, higher than the 5% that had been previously forecast. While the World Bank predicted 6.3%, the International Monetary Fund 5.3% and Indesa 4.5%.

The MEF estimates were given based on the dynamism of the economy, which until September was robust. The Monthly Economic Activity Index (Imae) grew 7.8% during the accumulated period from January to June 2023, driven by activities such as commerce, construction, tourism, banking, insurance, transportation and electricity, among others.