Panama: Economic activity decelerates again on reduced infrastructure spending
June 25, 2014
In April, the monthly indicator for economic activity (IMAE, Indice Mensual de Actividad Economica) expanded 3.0% over the same month last year, which was below the 4.5% growth registered in March. The result marked the lowest pace of growth since October 2009. According to the National Comptroller’s Office, the deceleration was driven by a slowdown in the construction sector as well as in mining and quarrying. The conclusion of various large public infrastructure projects, including the Panama City metro line, caused a reduction in activity in these sectors. Additionally, a two-week nationwide construction workers’ union strike slowed work on the Panama Canal expansion.
On a month-on-month basis, economic activity decreased 0.67% in seasonally-adjusted terms in April, which contrasted the 0.32% increase recorded in March, but was not as extreme as the record-low 1.25% drop recorded in February. Meanwhile, the overall trend continues to point downward; annual average growth in economic activity inched down from 7.2% in March to 6.8% in April, which represented the lowest reading since February 2011.
Author: Carl Kelly, Economist