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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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.

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

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