Revving Up

PANAMA - Forecast 05 May 2014 by Marco Fernandez and Guillermo Chapman

Executive Summary Though growth is slowing from its powerful 2012 peak of 10.8%, we are optimistic for 2014-2016, and project GDP GAGR at 6.3% (on the heels of 8.4% growth in 2013). The main reason for the slowdown is a fall in exports, and in fixed capital formation, as massive public investment and spending linked to Panama Canal expansion winds down. Services exports will suffer from slowing canal revenues, and the “shock” to Colon Free Zone activity (mainly due to FX limitations in Venezuela). Unemployment is expected to rise slightly, and interest rates may also rise, factors that coul...

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