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COUNTRY INSIGHTS

We calculate an 18% downturn in the economy for 2020 and a rebound of 4.7% for 2021
PANAMA · Forecast · 01 Feb 2021

We calculate a decrease in real economic activity of 18% for 2020. According to our estimations, construction (public and private) and related industries, retail trade, tourism, the Colon Free Zone, international transportation, banking, and energy production accounted for most of the recession. ...

The Government of Panama taps the bond market (between US$ 2 billion and US$2.5 billion), and the IMF approves a PLL for the equivalent of US$2.7 billion
PANAMA · In Brief · 20 Jan 2021

There was good news for the Government of Panama's finances at the beginning of the year. First, the IMF Executive Directorate agreed to a two-year Precautionary Liquidity Line of Credit (PLL) of US$ 2.7 billion with the Ministry of Economy and Finance, with US$ 1,350 million available for the fi...

Bad economic and epidemiological news at the end of the year: the slippery road ahead
PANAMA · Report · 24 Dec 2020

Panama is the worst performing economy in Latin America, except perhaps for Venezuela. The first semester drop in GDP (-18.9%) was larger than the second worst, Peru (-17.3%), and twice the regional average of -8.4%. The third quarter followed the same pattern: -23.6% reduction in activity, where...

Q3'20: Worse than expected
PANAMA · In Brief · 15 Dec 2020

Third quarter data confirm our gloomy forecast for 2020: 23.6% drop in Q3 and 20.4% up to September.Today, the National Institute of Statistics and Census (INEC) presented the results for Q3. They were pessimistic as expected, and more. Real GDP fell by 23.6% compared with Q3 2019, which itself w...

The National Dialogue begins amid dismal GDP numbers: what to expect on both issues
PANAMA · Report · 25 Nov 2020

November 26 is the government's date to open the discussion of the reforms on several important issues for the basic institutions of the country, with the participation of the main stakeholders in the Panamanian society under the United Nations' aegis. The dialogue - called "Closing the Gap" - wi...

A new strategy for reforms, a new budget, and the same political uncertainty
PANAMA · Report · 02 Nov 2020

On August 25, the President announced a national dialogue commencing in November, which includes topics such as the reform of the public pension plan, the rationalization of water, education, efficiency of national health services, and the Constitution. Our estimate for the timetable of the debat...

The recession continues, but the September opening of the economy may help in 4Q; the MEF goes to the market successfully
PANAMA · Report · 30 Sep 2020

The figures through July show double-digit decreases in real activity in all sectors with the exception of the Canal and seaports. Central Government revenues (taxes and non-taxes) are following the same pattern. The MEF issued debt for US$ 2.575 million: (1) a re-tap of the 2060 bond for US$ 1 b...

The partial lockdown of the people and the economy in July and August reduced our projections for 2020
PANAMA · Report · 01 Sep 2020

As the opening of the economy did not occur as anticipated, the outlook for economic activity, employment, tax revenue, etc., had to be revised lower this month, even assuming that a new normal −​ if contagion numbers improve −​ might take place in mid-to-late September. Our projections for 2020 ...

Growth perspectives drop sharply from the previous market projections. Cortizo just announced a 9% decline for 2020 and a rebound of 4% for 2021
PANAMA · Report · 31 Jul 2020

We project the GDP level and growth for 2020 based on the two scenarios: the re-opening of private and public construction and mining in the last quarter of the year, or a continued stalling of most economic activity due to the Covid-19 pandemic. The first would translate into a 9.5% decline (in ...

Panama moves backward (a bit) on its re-opening strategy
PANAMA · Report · 15 Jul 2020

The government of Panama announced a new quarantine schedule on Tuesday sine die, adding to the restrictions already in place (men could only leave home three times a week for two hours each day and women likewise, with a daily curfew after seven o`clock). Sundays are in total lockdown. Now, the ...

The pandemic hit the real economy and the fiscal situation harder than anticipated. Banks face a year of living dangerously…while the PRD Party (in power) criticizes Cortizo.
PANAMA · Report · 29 Jun 2020

The government's estimate of a GDP contraction of 3.3 percent for 2020 (projected in March by the MEF) seems optimistic now, because the economy is in a virtual shutdown of more than fifty percent of real activity, with no date in sight for further re-openings. Unemployment may double by the end ...

The latest numbers for the fiscal performance are surprising… for the wrong reasons
PANAMA · Report · 26 May 2020

The Ministry’s projection of the level of nominal GDP for 2020 is US$ 64,000 MM, a decrease of 2.8% compared to the official figure for 2019. We predict deflation of 0.5% for the year; therefore, real GDP, according to the fiscal quarterly data, might decrease by around 3.3% in 2020, a more pessi...

From person-to-person distancing to person-to market contacts: the journey to recovery
PANAMA · Report · 27 Apr 2020

The economic performance of Panama in 2020 may be slightly less optimistic than the projections of the multilaterals and rating agencies suggest (on average -2.0%), according to our estimates. The financing of a 6% NFPS deficit is almost complete, with a small gap to fill this year. We project a ...

The Panamanian government successfully funded the budget needs for the health and social expenditures required to battle the virus
PANAMA · Report · 27 Mar 2020

In the absence of monetary stimuli in a dollarized economy, the Ministry of Economics and Finance is giving the final touches to the pre-funding package of public sector expenditures for additional subsidies to poor families (cash and in-kind transfers). The MEF successfully floated US$ 2.5 billi...

The economy continued to slow down in 2019
PANAMA · In Brief · 02 Mar 2020

GDP grew 3.0% during 2019, according to official figures released today. This number coincides with our projection made in mid-year. The fourth quarter increased by 3.3%, the better performance of the year (3.1% in the first quarter; 2.9% in the second quarter; and 2.7% in the third quarter). As ...

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