Panama: Economic activity falls at record rate in May
August 5, 2020
Economic activity sank 40.9% in year-on-year terms in May, which was a deterioration from April's 34.7% decrease and marked the largest fall on record. According to the Statistical Office, the construction; hotels and restaurants; and transport sectors were the most affected.
Meanwhile, the trend pointed down, with the annual average variation of economic activity coming in at minus 4.0% in May, down from April's minus 0.4% reading.
The economy will remain hampered in the second half by the domestic Covid-19 outbreak making it difficult for all activity to resume. However, the economy’s medium-term prospects are still positive, as Lissette Escobar, economist at Oxford Economics, comments:
“Panama is one of the best-performing economies in the region, with a rapid growth rate likely to persist throughout the forecast period once the global recession caused by the pandemic has ended. Low inflation and a stable financial system help, as does a succession of major infrastructure projects.”
Author: Oliver Reynolds, Economist