Panama maintains stable projections for 2022

Anatoly Gaviria Feb 18, 2022

According to Torino Economics, the subsidiary of Torino Capital Group Company, a well-known investment bank and stockbroker based in New York, Panama has experienced a significant economic expansion, with an average annual growth of 6% in the last 25 years, the largest and fastest in Latin America.

The economist and spokesman for the firm, Luis Prato, mentioned that Panama has a risk profile that allows it to access the international financial market under favorable conditions. This represents an ideal opportunity to continue leveraging financing for development, by boosting the country’s infrastructure and potential growth.

Panama has the ninth largest copper ore reserves in the world, as well as large reserves of gold, manganese and iron, while hydroelectric power supplies 63% of all electricity in the country and contributes 26.3% of the Gross Domestic Product ( GDP), employing 18.6% of the active population.

The main industrial activities are in agribusiness, dairy, sugar refining, clothing manufacturing, petroleum products, chemicals, paper and paper products, printing, furniture and construction, a factor that constitutes a varied and diversified contribution to GDP, a good sign for the Panamanian economy.

According to Prato’s estimates, Panama will register a growth rate of 4.6% during 2022, the highest at the regional level, where not only the greater contribution of the Canal stands out, but also the push of construction and a sector with a very significant potential : The mining activity.

It is worth noting that the exploitation of mines and quarries represented 4% of the economy in 2020, a process that reaches maximum limits after the culmination of negotiations between the Government and Minera Panamá, a subsidiary of the Canadian First Quantum Minerals, a firm that develops in Colón, the Cobre Panamá project, which after several negotiations, finally materializes with a business that is expected to produce about 300,000 annual tons of copper, 100,000 of gold and 2,500 of molybdenum. As is known, the company accepted the proposal to deliver to the Panamanian Government a minimum contribution of $375 million per year.

The largest economic sector in the country is represented by services, with a 70.2% contribution to GDP and employing 67.2% of the labor force. If we put the magnifying glass into it, the transport subsector is the sector with the greatest push, since it includes the Panama Canal, which contributed more than $2,000 million to the Panamanian State in 2021, among which $1,487 million stand out for surpluses, rights for ton of transit and payment for services provided by the State. It is expected that, in 2022, the interoceanic route will contribute $2,497.2 million to the treasury, which would be a new record.

The services sector includes the Canal, banking, tourism, logistics, activities in the Colon Free Zone (ZLC), insurance, container ports, and flagship registry.

In June 2016, the country completed an expansion of the Panama Canal that allows the navigation of larger ships (Neo-Panamax ships) carrying 12,000 containers (compared to the limit of 5,000 containers under the old infrastructure).

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