Firm Panamanian economy to Latin America

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In the last two years there has been a contraction in regional growth

ALERT

After enjoying for nearly a decade of growth averaging 4% in the last two years (2015 and 2016) have recorded a regional contraction, in which the average growth in Latin America (AL) will end -0.6% of this year.

According to the Latin American Banking Federation (Felaban), the falling prices of commodities, lower demand for exports worldwide, reduced foreign direct investment and the decline in household consumption are just some of the events that have affected economic performance.

In addition, declining terms of trade, coupled with the growth of the current account deficit, have ended up having a negative effect on both the external sector and the sources of growth.

In this scenario, the Felaban adds the rarefied financial environment in developed countries, which is generated as a result of events such as bad moment in European banking and monetary policies of Europe, England and Japan, as opposed to expectations rising interest rates in the United States, who have made unpredictable, volatile and complex for conducting business in international financial markets.

In this context, the Felaban calls to AL, focused on improving structural variables such as education, the quality of institutions and progressivity of its tax systems, among others.

Panama, apace

As for Panama, in the first half of the year, the main driving sectors of the Panamanian economy were: the supply of electricity, gas and water (with an expansion of 11.6%); mining and quarrying (9.4%), construction (9.4%), financial intermediation (6.8%), private health activities (6.2%) and real estate, renting and business activities (6.5%).

For Raul Moreira, director of Economic and Social Analysis of the Ministry of Economy and Finance, one of the advantages of the Panamanian economy it is that it has a diversified structure.

For this reason, and although there is now the possibility of damages in some sectors, mainly those related to the external sector, the other sectors such as financial intermediation, construction and others, allow the country to remain a leader in growth AL, Moreira said.

According to Gross Domestic Product (GDP) growth forecast for 2016 by country of Panama is projected at 5.9% above the 18 countries in the region and just below that recorded Dominican Republic 6%. (View image).

Bolivar Alvarado, an economist, explained that although AL has come with affectations for several years, Panama remains strong due to the banking sector and the benefits given to foreign investors.

He added that Panama PUE that does not have a growth of 8%, but 5.9% is reasonable, despite the scandals that have suffered recent months.

FACT
4.6%

It was the growth of Panama in the first quarter of 2016