Less Economic Growth, More Fiscal Deficit

The low dynamism in the commercial activity and in the construction, will influence so that in 2019 the growth of the Panamanian economy is of 4.5% and not 5%, which would result in a rise in the fiscal deficit.

Monday, May 27, 2019

The Chamber of Commerce, Industry and Agriculture of Panama (Cciap) expects that by 2019 the country's economy will grow 4.5%, an estimate that is lower than that of the Ministry of Economy and Finance (MEF) which forecasts that economic growth will reach 5%.

See "Panama: Slight Economic Slowdown"

Manuel Ferreira, director of the Center for Economic Studies of the Chamber of Commerce Industries and Agriculture of Panama (Ceecam), explained to Elcapitalfinanciero.com that "... among the sectors which have maintained a greater dynamism are..: The Canal, the ports, the air hub, telecommunications services and the financial sector. Meanwhile, there was less favorable behavior in the activities of the domestic economy, in the areas of trade, construction and real estate activities, among others."

Ferreira added that "... even though economic growth for 2019 will be around 4.5%, surpassing 3.9% in 2018, this presents a serious problem for the next government to fulfill its promise to pay the debt of the State with its suppliers of goods and services and to give continuity to the public investment program contemplated in the State Budget in order to reactivate the economy."

Also see "Panamanian Public Debt Grows at 9%

If the business sector forecasts are fulfilled, the fiscal deficit will be greater than that projected by the government, since the official estimates for 2019 were made on the basis that the economy will grow 5%.

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Panamanian Economy will Rebound in 2019

December 2018

This year, the economy is expected to grow 3.8% and in 2019 the increase could reach 5%, which would be determined by the activities of the Canal, transportation, mining and telecommunications.

The Indesa firm forecasts that next year Panama's economy will increase its dynamism compared to 2018, since the activities related to the external part will register good performance.

Statistics on Public Finances in 2017

March 2018

Panama's GDP grew by 5.4% in 2017, with transport, storage and communication activities standing out as the most dynamic, as a result of the Canal expansion.

From a statement issued by the Ministry of Finance in Panama: 

March 27, 2018 The Minister of Economy and Finance, Dulcidio De La Guardia, presented today before the plenary session of the National Assembly of Deputies a report on the General Treasury Account corresponding to fiscal period 2017.

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The government has based its forecast of GDP growth on the recovery of activity in the Canal and public and private investment in infrastructure projects.

From a statement issued by the Ministry of Economy and Finance: 

Fulfilling the legal mission to project the evolution of gross domestic product (GDP) of Panama, the Ministry of Economy and Finance (MEF) has reported that the estimated growth of the economy for this year is 5.8%, driven by dynamism in the sectors of construction, mining and quarrying, financial intermediation and supply of electricity, gas and water. 

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According to economist Thelmo Vargas, a partner at the consulting firm Ecoanálisis, the forecast is of a base scenario in which interest rates are 5%, the economy grows at a rate of 4% and a primary deficit of 3% is registered for production.

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