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panamajames
  7/10/2021 08:42 EST

Panama’s economic recovery will lead the region with a growth of 8.2% in the gross domestic product (GDP) by 2022, according to the report of the Economic Commission for Latin America (ECLAC), released Thursday, July 8th, on the economic impact and of the Covid-19 pandemic.

In 2020, when the pandemic appeared, GDP closed at -17.9% and for 2021 the recovery is projected at 12%, according to ECLAC. However, it still does not reach the GDP growth levels of 3.7% in 2019, before the health crisis.

At the regional level, ECLAC raised its average growth estimate in 2021 to 5.2%, a figure that denotes a rebound from the deep contraction of 6.8% recorded in 2020 as a result of the adverse effects of measures adopted to combat the pandemic.

According to the United Nations, this expansion will not be enough to ensure sustained growth since the social impacts of the crisis and the structural problems in the region have worsened and will continue during the recovery stage.

The blow of the pandemic in the economies of Latin America has been catastrophic when compared to the rest of the world since 1.2 million deaths are registered due to the disease, which is equivalent to 32% of the world's total of deaths. Latin America only represents 8.4% of the world population, that is, the percentage of deaths is four times more than the percentage of the world population.

In Latin America, 13.6% of the population has been vaccinated, well below the percentages in other regions such as Canada and the United States, where 46.3% of the population is already vaccinated.

Among the 31 Latin American countries, Panama has 13.6% of the population with complete vaccination, below other countries in the area such as Cuba, with 13.8%; Colombia, 14.6%; Mexico, 15.4%; Costa Rica, 15.9%; El Salvador, 17.9%.

“The panorama is complex and if we do not make the changes, if we do not eliminate once and for all the culture of privilege expressed in evasion, in illicit funds and tax expenditures and excessive concentration of wealth, we will not be able to get out of this low growth trajectory ”, warned Alicia Barcena, executive secretary of ECLAC.

Planning4PTY
  7/15/2021 11:03 EST

Thanks for this update, James. I sure hope the government can get more vaccines out to the public in order to avoid this forecast falling flat.

If Panama is leading the region in economic growth (8.2%), how close are other Latin American nations?
...Terry

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bhulsey79
  7/15/2021 16:43 EST

"....if we do not eliminate once and for all the culture of privilege expressed in evasion, in illicit funds and tax expenditures and excessive concentration of wealth,..."

Sounds like she got her degree from the Chairman Mao School of Economics.

shar501
  7/15/2021 16:50 EST

For Sure!

JSBS
  7/16/2021 13:24 EST

So you are for these things....tax evasion, illicit funds, etc. etc.???

bhulsey79
  7/16/2021 13:48 EST

So you are for government bullies deciding how much money people are allowed to make before they are labelled privileged and excessive with the inference that they will be punished for being too successful??

Sounds very Stalinist to me.

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JSBS
  7/16/2021 15:19 EST

Wow! That's a leap. No, I am for leveling the playing field and stemming the ever increasing corruption. I am for tax laws that do not allow the wealthiest to avoid paying their fair share of taxes. I am for anti-trust laws being enforced so that mom and pop businesses and mid sized businesses in the have a chance. I am for ending lobbyists in Washington DC, fair drug prices, fair medical costs, etc. You get the idea. I am for Panama avoiding these pitfalls and not letting greed take them down the same path as the US. Make as much money as you can...fairly and honestly.

JSBS
  7/16/2021 15:25 EST

I would also like to see Panama's government work more for the people. The country seems to have enough money but the people do not. The canal, the copper mine, the finance industry here all fund the government. Nothing for the people. Once you are out of the two major cities there is little work available other than working in stores and the service industry along the highway. The people do not seem to have enough opportunity to lift themselves from what I can see. Am I missing something?

ROKSlide
  7/16/2021 15:47 EST

JSBS Yep, you are missing something. For one, the social security system includes virtually anyone employed. It provides not only retirement income, but health care and some unemployment insurance. Perhaps more importantly, over the last 20+ years, the government has spent all of its money on infrastructure, which was virtually non-existent prior to the return of the canal in 2000.

Alameda
  7/16/2021 18:22 EST

Thank you for the post.

'Skepticism' should remain the operative term about Panama's economic growth prospects.

Panama, like the rest of the world, will not be able to vaccinate itself out of the pandemic.

As is already clear in nations where vaccine rates exceed 50% (Israel, UK, Uruguay, Chile, USA), the efficacy of the jab dramatically weakens in a few months in the face of new, highly infectious variants.

Further, higher vaccination rates puts pressure on the virus to naturally select even more infectious strains.

This has already lead to a viscous circle that we cannot extricate ourselves from using the current approach of lockdowns and vaccines.

Like everyone else, Panama will need to learn to live with and manage COVID; and, the immune escape variants that have been- and are being currently being driven by- our illogical human interventions.

The good news for Panama is that the Canal is well positioned to assure an economic baseline and a degree of stability, while other nations in the region do not have that failsafe.

A total collapse of the Panamanian economy cannot be envisioned.

However, the situation in neighboring countries- where the cascading effects of mismanged COVID coupled with inherent institutional weaknesses- could prove catastrophic. A spillover into Panama should not be dismissed.

In short, hope around sustained economic growth for Panama will remain just that: hope; until natural population immunity is reached.

2024-2025 at the earliest.

I pray that I am wrong.

JSBS
  7/16/2021 18:28 EST

Well, the 2 year old copper mine is scheduled to exceed the canal in revenue next year, and has already contributed mightily to the economy this year. Add finance/banking and agriculture........

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Alameda
  7/16/2021 18:40 EST

You are correct: mining is a potential boon, as is energy and expanded logistics.

Still, those each remain many years away; and, depend on the overall health of the global economy, which is already sliding back towards late-2020 levels.

As to the banking sector in Panama, please remember that almost no one has paid on any kind of loan- personal or commercial- since March of 2020; and; the banks are just now being given the latitude by the government to finally negotiate with their clients by year's end.

The formal economy remains nearly frozen, while the informal economy is barely alive. Personal and corporate savings have been mostly liquidated.

The bomb went off in 2020 and the shockwaves are just being felt...

JSBS
  7/16/2021 18:48 EST

Not sure what you are referring to re mining. Copper mining is HERE NOW. With the largest copper mine in the world already contributing almost as much as the canal last year and expected to do more this year and on and on. The banks here do not need our personal accounts at all. Geez they do so much international /global banking with investors, countries as well as corporations that they do not need our money at all. The problem is that the Panamanian PEOPLE are not getting any money! The country is doing nothing for areas outside PC and David to speak of. No business, no industry, no tech, no nothing! Can't pull yourself up by your bootstraps when you have no boots!

Alameda
  7/16/2021 19:06 EST

You are correct.
The COVID response is exacerbating the fault lines within all societies.

In Panama today, it is evident with lack of capital to SMEs and education.
Multi-nationals and their Panamanian allies are able to access global capital markets at will.
For locals, the freeze in the banking sector is killing them. Working capital is unavailable as are paying customers.
In education, the public schools are still not back in class; and, the prospects for a return remain uncertain at best.
The international schools have been in-person since March.
Nito and the PRD have no real answers for any of this except to "follow the science" as interpreted by Sucre and his team...
Only the rich and connected prosper. Everyone else will continue to suffer.

panamajames
  10/9/2021 13:37 EST

Panama’s economy will grow 9.9% this year, according to a new report published by the World Bank.
According to this forecast, Panama would be among the countries with the highest growth rate in Latin America, behind Guyana (21.2%), Peru (11.3%), and Chile (10.6%). For next year, the international organization's estimate for Panama is a growth of 7.5%, also among the highest in the continent. In a press conference with the region's media, William Maloney the Bank's chief economist for Latin America and the Caribbean briefly referred to the evolution of the Panamanian economy. He said that the country received strong blows in sectors such as tourism and air transport, and stressed the importance of reactivating them. He also noted that there are similar challenges to the rest of the region, such as greater integration, improving infrastructure, and the quality of education to improve growth rates in the medium term. Latin America and the Caribbean as a whole will grow 6.3% in 2021, which will not be enough to completely reverse the 6.7% contraction recorded last year. The agency noted that to achieve the growth rate necessary to move the region forward and reduce social tensions, reforms must be urgently carried out in the areas of infrastructure, education, health, energy policy, and innovation, in addition to facing the new challenges of climate change.

https://www.newsroompanama.com/business/panama-economy-will-grow-9-this-year-world-bank

panamajames
  10/12/2021 21:53 EST

In 2021 Panama's economy will grow due to copper exports. Minera Panama represents the largest foreign investment in Panama, $ 6.7 billion, and contributes 39 thousand direct and indirect formal jobs to the economy and buys $ 583 million annually from other sectors of the economy. Therefore, the management of the negotiation process of the Contract between the State and Minera Panama can mark a “before and after” of FDI (Foreign Direct Investment) in the country. Panama needs to attract foreign investment to generate formal employment and develop its strategic sectors (not just mining). We need to improve the investment climate in the country.


With the aim of promoting conservation and research tourism in the province of Bocas del Toro, projects for more than $ 100 million have been started, with a development model that maximizes tourism potential, attracting conscious travelers who appreciate and contribute to preserving nature and Bocas culture. The projects are part of the Sustainable Tourism Master Plan (PMTS 2020-2025) developed by the Panama Tourism Authority (ATP) and the Tourism Cabinet, in collaboration with other institutions such as the Ministry of the Environment (MiAmbiente) and the Ministry of Public Works (MOP). The general administrator of the ATP, Iván Eskildsen, said that: “Bocas del Toro is the destination that is receiving the largest amount of new public and private investment. The destination has wild beauty and authentic culture, something that travelers of our time seek. "The main challenge lies in taking care of the destination to ensure that in 20 years it continues to bring prosperity to the population, taking care of its natural and cultural heritage, which differentiates it in a competitive way," said Eskildsen.
The advancement of the tender for the path to Wizard Beach, on Isla Bastimentos, was highlighted, with $ 250,000 to have interpretive paths, signage and other facilities as part of the 1,000 project Km of trails. Projects are also advancing in Old Bank, in Isla Bastimentos, which is one of 11 pilot communities of the PACTO community tourism project, which is executed with the Panamanian Foundation for Sustainable Tourism, the project "Beautification of Afro-Caribbean architecture" is being developed, which consists of improving the exterior of some 50 homes, to make the place more attractive to visitors. Elizabeth Cedeño, from ATP, presented the 11 projects that are being executed through financing funds from the Inter-American Development Bank (IDB), among them: integral solid waste management; Potable water supply; land use planning and climate change scenario studies; the creation of a visitor center under a contract with the Amador Foundation (Biomuseo); tourist signage; smart urban management; tourism entrepreneurship, strengthening of tourism chambers. These projects that are being carried out diversify the tourist offers in the Isla Colón district and improve the quality of life for 16,585 resident inhabitants and 43,954 among the population of Changuinola and Almirante, which are part of the tourist routes established in the PMTS. For its part, the Tourism Cabinet presented the projects destined for Bocas del Toro for an investment amount of $ 91 million. "The objective is to promote tourism and create benefits for the community, improving their quality of life," said the executive secretary of the Tourism Cabinet, Samir Gozaine. He stressed that, with the improvements to the Isla Colón aqueduct, the production of drinking water will be increased, improving the existing system and benefiting more than 17 thousand inhabitants. This work has an investment amount of $ 6 million. The MOP, for its part, bid for a sum of $ 59.9 million dollars for the rehabilitation of the highway to Boca del Drago. Another important project for Bocas is the interconnection of Isla Colón to the National Electric Grid, which will improve the connectivity of Isla Colón. With an investment of $ 25 million, it will guarantee clean energy and reduce carbon emissions from burning the fuel used to generate electricity today. Through the PMTS, the ATP seeks to value the Bocas Hope Spot designation, by Mission Blue, founded by National Geographic explorer Sylvia Earle, focused on the conservation of Bocas del Toro. In this way, this coalition is strengthened, which with the slogan "Without the Sea, there are no Bocas" recognizes the extraordinary value of the nature of Bocas and the need to join efforts between the scientific, business, conservation community and authorities, to ensure the future of the inhabitants of this destination.

panamajames
  11/25/2021 05:14 EST

The monthly index of economic activity (IMAE) of Panama between January and September grew by 14.94%, compared to the same period in 2020, which shows "the recovery process after the impact" in the productive apparatus of the health emergency due to the covid-19 pandemic.

In September the IMAE, expanded by 18.02%, compared to the same month of the previous year, according to data from the National Institute of Statistics and Census (INEC) of Panama released Tuesday. November 23rd.

In the first semester of this year, the Panamanian gross domestic product (GDP) expanded by 10%. International risk rating agencies and agencies foresee that the indicator will grow between 8% and 12% in 2021

The expansion of the IMAE in the three quarters of the current year was driven by the mining industry, due to the export of copper ore and its concentrate, as well as construction, the execution of public investments and the gradual reactivation of many private projects private, said the INEC.

Economic activity showed a positive rate in indicators such as re-exports in the Colon Free Zone, and local retail and wholesale trade, as well as transportation, storage and communications services, due to the good performance of the Panama Canal and the movement of containers in ports.

On the other hand, hotel services continued to show negative rates, especially due to the low influx of tourists, hikers and passengers in transit, the statistical entity said.

panamajames
  12/19/2021 22:21 EST

The constant transit of Neopanamax vessels through the Panama Canal, since the inauguration of the new locks, on June 26th 2016, produced in the fiscal year 2021 the tonnage that was projected for 2025. The fiscal year, ending September 30th, reached a volume of 516.7 million tons CP / Suab (universal system of tonnage of ships of the Panama Canal), 8 million more than the estimated for 2025, which was 508 million tons, according to the most probable forecast indicated in the Canal expansion proposal in April 2006. For the former administrator of the Canal, Jorge Luis Quijano, several factors have promoted this behavior, including the growth in the size of the Neopanamax container ships, which at the time were thought to not exceed 12,500 TEU (unit equivalent to a 20-foot container long) and that today already reach up to 15,383 TEU (Triton of Evergreen), by optimizing their design to that of the new locks of the Panama Canal. "Also of consideration is the unexpected growth in the traffic of ships with liquefied natural gas and liquefied petroleum gas, both due to unexpected levels of exports from the United States and vehicle carriers that can only use the new locks," he explained. The budget approved for fiscal year 2022 of the ACP anticipates 536.6 million tons CP / Suab, that is, about 20 million tons more than the 516.7 million of 2021. In contributions to the National Treasury, it is expected to deliver $2,497.2 billion the highest contribution in the history of the Canal to the country. The Canal's budget for fiscal year 2022 calculates revenues of $4.215 billion, the highest amount budgeted for the waterway's operations since its inauguration in 1914.

panamajames
  12/23/2021 10:30 EST

The Colon Free Zone reported transactions of $14.94 billion from January to October this year, up 27% from the same period last year.

The second-largest commercial area in the world, Colon, is close to recovering the momentum it registered before the pandemic that kept it paralyzed for over six months last year.

According to a report from the ZLC administration, the commercial movement registered until last October is 4% lower than the number of transactions reported in the first 10 months of 2019, when $15,582 billion were registered.

Edwin Chen, president of the ZLC Users Association, commented that the data recorded to date is positive and reflects a tendency to regain the rhythm that was interrupted by the pandemic.

"The numbers are positive and we are confident that the positive trend will reinforce during 2022, but we must work so that the recovery is the same for all the companies that operate in the ZLC," Chen said.

In the breakdown of the commercial activity, it is an observation that China is the main supplier of the companies that operate in the ZLC, followed by the United States, Mexico, and Hong Kong; while Costa Rica, Guatemala, Colombia, Venezuela, and Honduras are the main destinations for re-exports.

The sale of electronic, pharmaceutical, chemical, perfumery, and cosmetic products, clothing in general, common metals, and alcoholic beverages remain among the main drivers of growth in the Colon free zone.

panamajames
  12/25/2021 11:20 EST

In the first 10 months of 2021, Panama exports reached $2. 816 billion for the year, close to an historic high. 77% was copper, extracted from the Donoso mine in the province of Colón. The rest comes from bananas, seafood, coffee, clothing, rum, and industrial products, which have been in positive growth for the country since 2020, despite the border closures caused by the pandemic.

panamajames
  12/30/2021 06:47 EST

While Panama continues its battle with covid-19 the country continues to attract companies seeking to establish operations and The Ministry of Commerce and Industries (MICI) reports that, 18 licenses have been approved for the establishment of headquarters of multinational companies (SEM). The number exceeds the 17 that received the go-ahead last year. Jeannette Díaz Granados, general director of SEM, commented that there are 4 other applications that under review to determine if they comply with the requirements of Law 41 of 2007. Among the requirements that companies seeking to obtain the benefits of Law 41 must meet are those related to assets that must be equal to or greater than $200 million. If the company does not comply with this point, it can also apply for the SEM license if it verifies that it provides services to at least seven affiliates, subsidiaries or associated companies. Díaz Granados indicated that the investment of the 18 new licenses approved reaches $37.8 million, exceeding the $12.5 million of the estimated investment last year and the $9 million of 2019. In total, there are 178 active licenses for multinational company headquarters representing a combined investment of $1.2 billion. Automotive, aeronautics, manufacturing, entertainment, marketing, advertising, research, consumer goods and personal care, food, and beverages, textiles, footwear and jewelry, transportation and logistics, technology, telecommunications, basic and industrial chemicals, pharmaceuticals, call centers, consulting General, financial services, insurance, energy, oil and gas, engineering and construction, are the sectors where SEM companies established in the country operate.

sweethomepanama
  12/30/2021 14:32 EST

I would be interested to know who actually owns the companies that are being approved and moving in to Panama.

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