Economic Reforms

The global economic predictions have indicated that Panama is among the Latin American countries that will experience a big boost in several areas of the economy. This much expected economic turnaround will be promoted by the focus on developing the public and private investment sectors of the economy. It is also important to note that this prediction has been confirmed by the Ministry of Economic and Finance in the recent report released by this ministry which speculated an upsurge in the GDP for Panama by 5.8% in 2017.


Further evidence to support this prediction can be seen from the reports for the growth of Panama’s GDP where the World Bank estimated an appreciation to the tune of (5.4%), the Economic Commission for Latin America and the Caribbean put their figure for Panama's GDP at (5.9%) and the International Monetary Fund pegged the estimated percentage value for Panama’s GDP appreciation at (5.8%).


With a majority of the Latin American countries expected to perform excellently in 2017, The Dominican Republic has been identified as the country with the highest prediction for the GDP growth at 6.2%, while the cumulative growth expected for the entire Latin American economy is expected to increase by 1.3%.


 The expected boost in the economy of Panama will be the beginning of a chain of progressive economic events that will change the business industry in Panama.

There have also been projections made by Raul Moreira, the director for economic and social analysis at the Ministry of Economics and Finance who expects the GDP to rise to as high as 6%.


In compliance with the legal mission of projecting the evolution of Panama's Gross Domestic Product (GDP), the Ministry of Economy and Finance (MEF) reported that the country's economic growth estimate for this year is 5.8%, driven by dynamism, Construction, mining and quarrying, financial intermediation and electricity, gas and water supply.


Raul Moreira, director of Economic and Social Analysis at the MEF, explained today at a press conference that the estimate of the GDP of the MEF coincides with the forecast of the International Monetary Fund that puts it at 5.8%. The Economic Commission for Latin America and the Caribbean (ECLAC) projected the expected growth to increase by 5.9% and the estimated rise in GDP given by the World Bank is5.4%.


The MEF's estimate of economic growth in the country is dependent on the recovery of the Panama Canal activity and a more aggressive public and private investment program. The Ministry pointed out reasons for its positive forecast; they include the evident recovery of the economies in Latin America, as well as a positive dynamism prevalent in the global economy.

 

In this scenario, the Panamanian economy will continue to exceed the average growth rates expected for the Latin American countries; this has been estimated by ECLAC to be 1.3%.


The execution of public investment projects such as the Third Bridge over the Canal (570 million balboas), Ciudad Esperanza (137 million balboas) and the construction of the Metro Line 2 of the capital will promote the dynamism of the economy.


In the private sector, projects such as the First Generation Power Plant have been established under the Natural Gas of Central America (Colón); this was accomplished with an investment of 1,150 million balboas and that of Minera Panamá, in the Project Cobre Panamá (Colón) which was executed at the sum of 5,950 million balboas.


Raul Moreira the director of Economic and Social Analysis of the MEF, in the coming months, there will be a significant increase in the energy generation from renewable resources (wind and solar) at remarkably lower costs when compared with the costs of energy generation from fossil fuels. This will contribute to the improvement in the services expected from the national electricity institutions.


The MEF projects an estimated growth of between 5% and 5.2% by 2017. This will be made possible by the vibrant activities in various industrial sectors like the construction, mining and quarrying sectors, financial intermediation, investments in public infrastructure and the improvement in power generation.

There is confidence in the forecasts by the MEF for the year 2017 since the speculations are similar with the projections made by the IMF and the ECLAC. The World Bank’s projections of growth in the GDP for 2017 are also reported to be 5.6%.
Moreira has stressed the importance of the Panamanian government to sustain the economic growth that will be witnessed by managing the inflation tendencies which will promote the business growth in the smaller economic sectors.


The MEF regularly updates the projection that represents the evolution of GDP, according to the development of the regional and global economy.




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