After 2018, with projected growth of around 4%, the most moderate in the current decade, projections indicate that the country’s economy will rebound at rates above 5% in the short and medium term.
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This is the estimate of the International Monetary Fund (IMF) , which recently published its conclusions on the annual review of the economy of Panama under Article IV and after the visit to the country.
For 2018, the entity calculated a growth of 4.3% as a result of the slowdown in key sectors, including construction, affected by a one-month strike by workers. The lower dynamism translated into a marginal rise in unemployment to 5.8%, while inflation would remain controlled despite the increase in the price of food and fuel.
In 2019 a recovery of two percentage points is expected, to reach a growth rate of 6.3%.
“It is projected a growth of 4.3% in 2018, a rebound to 6.3% in 2019, supported by the opening of a large mine and the recovery of construction to converge towards its potential of 5.5% in the medium term.”
The greatest dynamism would be supported by the start of operations of the Colón copper mine and the recovery of construction. With a collective agreement already agreed for the next few years, it is not expected that there will be a similar break in activity to that of 2018. This factor, together with the start of major public infrastructure works, will make a difference with respect to the previous year.
The analysis of the international organization coincides with that of local experts. The president of the National College of Economists, Olmedo Estrada, told this newspaper that 2019 is presented with positive prospects. The Panama Canal, mining, international trade and logistics and the financial center will provide gross domestic product (GDP) with important levels of production to sustain a 5.5% growth, supported by public and private investments.
For its part, the local consultant Indesa also reflects in its projections an acceleration of the economy, although with lower rates of growth: from 3.8% in 2018 it would increase to 5% in 2019.
In terms of public finances, the IMF projects moderate fiscal deficits in line with the provisions of the Fiscal Social Responsibility Law, which, together with economic growth, would lead to a reduction in the ratio between debt and GDP to levels close to 33% in 2023 from 38.3% in 2018.