Bad economic and epidemiological news at the end of the year: the slippery road ahead
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, whereas the Latin America average was -7.5%. Panama was the only country with officially reported numbers that had a double-digit decrease in Q3. Our estimations of a 13.8 percent reduction in real activity for the year (the more pessimistic projection of most international analysts) might be optimistic considering recent numbers.
Despite the authorities' efforts to curtail the effects of Covid-19, the epidemiological numbers of Panama are deficient compared with other Latin American countries, according to World Odometer. Regarding the number of cases per million inhabitants, Panama is near 50,000, ahead of Brazil and Argentina with 34,000. In terms of deaths per million inhabitants Panama is fifth (836), after Peru, Argentina, México, and Chile. On the positive side, Panama is the second country (behind Chile) in the number of tests per million (273,873) at a rate of more than 13,000 per day.
The main issues that we foresee in terms of public policy during 2021 are:
* The design and approval in the Legislative Assembly of fiscal reforms, digging into the structure and performance of tax and non-tax revenues, and expenditure size and composition.
* A financially viable and politically acceptable reform of the solidarity sub-program of the CSS pension plan.
* The reinvention of the sources of growth of the national economy.
* Exiting GAFI's “gray” list.
Reform of the justice system and the weakening of the rule of law generally, and in particular, in economic issues.
Now read on...
Register to sample a report