Panama, on the lookout for global growth

Panama, on the lookout for global growth

If the world economy grows 3.1 percent this year, probably Panama will have better trade with other countries.

The growth of 3.1% of the world economy, a more robust percentage than in 2017, should benefit the Panamanian economy as a service country; however, if it weakens, so will the results for the country.

Earlier this year, the World Bank predicted that the world economy would grow 3.1%, however, organizations such as the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF) have warned that the global economy could have weakened more than expected due to trade tensions between China and the United States.

Last month, the IMF lowered its global growth forecast for 2018 and 2019 to 3.7%, against the 3.9% calculated earlier. Meanwhile, the global economic outlook that the OECD draws is not very encouraging. The OECD predicts that next year the global economy will begin a slowdown as a result of the commercial tensions, basically, due to the tariff dispute between the United States and China, the stricter financial conditions and the impact of oil prices.

Increase

3.8 percent will grow Panama this year, according to the forecasts of Indesa.

3.1% Panama's economy grew in the first six months of this year.

The protagonists of this trade war, China and the United States, do not escape from reality. AChina is estimated to have GDP growth of 6.6% in 2018 and 6.3% in 2019, one tenth less than what was estimated in the previous report of the OECD.

In the American case, it will be 2.9% this year and 2.7% next year. Both fall in 2020 to 6% and 2.1%, respectively.

The president of the National Council of Private Enterprise (Conep) of Panama, Severo Sousa, emphasizes that to the extent that world markets have better economic climate, it is more likely that Panama has a better trade with them for being a country globalized and that exports mainly services. Olmedo Estrada, president of the Association of Economists of Panama, agrees with these proposals, saying that while the economies are beginning to recover globally, this is a good sign for countries like Panama, which depend on the economies to improve their condition.

He explains that when economies are growing very low, they do not have the resources to buy goods and services from other countries. So if the economies of Central and South America begin to grow, it means that they are in a healthy condition and have the resources to buy goods and services from other countries.

If the growth of 3.1% is achieved worldwide, a positive message is sent to the world and to those countries that make strategic commercial alliances to increase economic activities.

Perspectives

Although this year the Panamanian economy has shown signs of weakening and could grow below 4%, the outlook for 2019 is still above 5%, even close to 6%, explained the economist.

Estrada indicates that this is due to the fact that this year, due to the strike of the workers of the National Union of Construction Workers (Suntracs), they stopped producing close to 900 million dollars and its impact on the economy has left negative numbers this year. Reason why the estimated 5% will not be reached.

For the other year, it is unknown what situations or phenomena may appear, but it is expected that investments in mining, the development of ports, the Panama Canal, the financial center and logistics that are marking very positive dynamics will help in 2019 you have a strong and robust economy and with the prospect of growing more.