Panama: Economic activity growth falls to one-year low in October
Economic activity grew 5.1% compared to the same month a year earlier in October, which was a deterioration from September’s 6.4% increase. October’s figure marked the worst reading since October 2022. Traffic restrictions in the Panama Canal due to drought and the El Niño weather phenomenon weighed on activity, as cargo volumes fell at a sharper pace and traffic declined year on year in October. In addition, toll revenues from the Canal grew markedly less in the month. More positively, higher tourist inflows supported the services sector.
Meanwhile, annual average economic activity growth rose to 7.9% in October (September: +7.8%).
Analysts at the EIU commented on the outlook:
“We expect private consumption and investment to support economic growth. However, private consumption growth will be weaker than in the past, owing to an elevated unemployment rate […] and high labour informality. Fixed investment will rise as public works projects continue; these include the US$4.4bn expansion of Panama City’s metro, a new US$1.5bn bridge over the Panama Canal and a US$1.2bn gas-fired power plant at Gatún. Services will remain a pillar of the economy.”