Panama GDP Q2 2021


Panama: Economy grows at quickest pace on record in Q2

September 17, 2021

According to a preliminary estimate, economic activity rebounded in the second quarter, increasing 40.4% year-on-year and contrasting the 8.5% contraction recorded in the first quarter. That said, the reading was heavily flattered by a low base effect, and activity was still below 2019’s pre-pandemic levels.

The industrial sector spearheaded the upturn, growing 162.3% in Q2 (Q1: +11.8% yoy), as ambitious public infrastructure spending boosted the construction subsector and the new copper mine drove up mining and quarrying production. In addition, the services sector grew 19.4% annually in the second quarter, contrasting the first quarter's 9.7% contraction, amid strong wholesale and retail sales and robust transportation activity. Meanwhile, the agricultural sector rebounded in Q2, growing 7.3% and contrasting the 0.9% decrease recorded in the previous quarter.

Moving onto Q3, the economy should have continued to recover at a healthy, albeit slower, pace. The key construction subsector likely continued to benefit from infrastructure projects, but will have been impacted by the fading base effect. Meanwhile, mining activity likely followed a similar pattern, as copper output at the Cobre Panama mine began to increase during the third quarter of last year.

FocusEconomics Consensus Forecast panelists project that the economy will expand 11.0% in 2021, which is up 0.3 percentage points from last month’s forecast, and grow 6.4% in 2022.

Author:, Junior Economist

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Panama GDP Chart

Panama GDP Q2  2021 0

Note: Year-on-year changes of GDP in %.
Source: Instituto Nacional de Estadística y Censo and FocusEconomics Consensus Forecast.

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