Panama Expat Forum

panamajames
Joined 2012
Posts: 5096

6 years ago

Panama - Fastest growing country in Latin America

6 years ago

Panama is the fastest growing country in Latin America and the Caribbean concludes the recent study prepared by Latin Consulting, AIH Capital and Aguaclara Consultores e Inversiones.
In the case of the NFPS debt to GDP ratio, it went from 37.1 % in 2014, to 38.8% in 2015, to 39.1% in 2016 and to 39.8% in 2017.
According to estimates of the economic group, led by economists Aristides Hernández and Eloy Fisher, Panama's economy grew 5.4% in 2017 and will expand 5.6% in 2018.
According to the experts, the activities that sustained economic growth in 2017 were ports, the Panama Canal, construction, public investment and public spending. Other activities such as the agricultural sector, industry, commerce, tourism, real estate, public services, banking and betting, yielded modest results. Fishing and domestic services showed red numbers last year, the report added.
Regarding inflation, the report argues that consumer prices remained stable in Panama (0.5%) in 2017, however, they warn of the strong increase in housing prices. In January 2015, the average price per square meter of housing in the capital city was $ 1,700 and, in June 2017, $ 2,050.
By 2018, the experts do not foresee important changes in the behavior of the economy. The impact of Panama's relations with Mainland China will depend on how much the Panamanian State prepares to take advantage of the benefits. Foreign investment and economic activities such as tourism could be the first beneficiaries of the new diplomatic relations, analysts add.
For economists, a major challenge for Panama in 2018, a pre-election year, will be to comply with the Fiscal and Social Responsibility Law, which imposes a cap on the NFPS deficit with respect to nominal GDP. The temptations to reform this Law in 2018, to increase the fiscal deficit, are latent, but would put at risk the degree of investment that the country has since 2010.
From the international perspective, Panama ranks 60th out of 188 countries in Human Development, according to the United Nations. In Ease to Do Business (Doing Business), it is in position 79 among 190 nations, according to the World Bank. In Economic Freedom, is in position 54 among 180 nations, concludes the Heritage Foundation. In corruption, it is rated as a nation with a high perception of corruption by Transparency International (position 87 among 176 countries). Panama is among the 10 countries in the world with the worst inequality, according to the World Bank, concludes the study.

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