Cepal expects the Panamanian economy to grow 5.6%

Cepal expects the Panamanian economy to grow 5.6%

For this year, an upturn in the construction sector is expected, driven by investment projects in public infrastructure.

By: La Estrella de Panama

The Economic Commission for Latin America and the Caribbean (ECLAC) reviewed its prospects for economic growth for Panama with an upward trend and ranks it among those that will grow most in the region. By 2019, the Panamanian economy is expected to grow by 5.6%, according to the Preliminary Overview of the Economies of Latin America and the Caribbean published by ECLAC. 

According to the analysis, an upturn in the construction sector is expected for this year, driven by the various investment projects in infrastructure, mainly public, including the construction of the fourth bridge over the Panama Canal, the expansion of the Panama-Panama highway. Arraiján, the extension of Line 2 of the subway to Tocumen and the start-up of the copper mine located in Colón, which, in full operation, is estimated, will be able to produce more than 320,000 tons of copper per year.

ECONOMIC PROJECTIONS 2019 FOR THE REGION

In the projections for 2019, downside risks prevail. For this year 2019, in addition to Panama (5.6%), the Dominican Republic (5.7%), Peru (3.6%), Colombia (3.3%), Guatemala (3.0%), Costa Rica (2.9%), Mexico are also expected to grow. (2.1%), and Honduras (3.6%), although to a lesser extent than the 2018 projections. Brazil will also grow (2.0%), Honduras (3.6%), Chile (3.3%) and Paraguay's will remain ( 4.2%) to mention a few countries in the region. On the contrary, the economy of Argentina (-1.8%), Nicaragua (-2.0%) and Venezuela (-10.0%) is expected to lose dynamism.

The balance, one of the most important annual reports of the ECLAC, analyzes in its 2018 edition the economic performance of the region during the year, the international context, the macroeconomic policies that the countries have implemented and delivery perspectives for 2019. According to In the analysis, during the first semester of 2018 there was a loss of dynamism in the Panamanian economy, which grew 3.7%, 2.1% less than in the same period of 2017, when it grew 5.8%.

For this period, the sectors that remained dynamic were: transportation, storage and communications (7.3%), due to a 10.3% increase in Panama Canal operations and an increase of 15.9% associated with passenger traffic; the fishing sector (15.2%), thanks to a significant increase in shrimp exports and trade (3.9%), mainly due to an increase in wholesale trade (5.1%); and the activities of the Colon Free Zone (4.9%).

On the contrary, the construction sector grew only 2.0% (8.2% in the same period of the previous year) due to the general strike of workers in the second quarter. As a result of the above, the growth of the mining and quarrying sector was also significantly reduced (2.0% compared to 8.1% in the first half of the previous year).

As in the previous year, the inter-annual variation of the CPI to October 2018 remained low and stood at 0.8%. The sectors with the highest price increases were education (3.7%) and alcoholic beverages and tobacco (1.3%).

For their part, the sectors that registered a fall were clothing and footwear (-0.9%), communications (-0.8%) and food and non-alcoholic beverages (-0.9%). Finally, the national unemployment rate to March 2018 was 5.8% compared to 5.6% on the same date of the previous year, while the open unemployment rate remained at 4.6%.

According to ECLAC, the countries of Latin America and the Caribbean face a complex global economic scenario in the coming years, in which a reduction in the dynamics of growth is expected, both in developed countries and emerging economies, accompanied by an increase in the volatility of the international financial markets. Added to this is the structural weakening of international trade, aggravated by trade tensions between the United States and China. It is expected that both developed and emerging countries will lose dynamism.