Panama: Economic activity hits four-year low on interruption of Canal expansion project
April 25, 2014
In February, the monthly indicator for economic activity (IMAE, Indice Mensual de Actividad Economica) expanded 4.5% over the same month last year, which was below the 6.5% growth registered in January. The result marked the lowest pace of growth since January 2010. According to the National Comptroller's Office, the deceleration was driven by a slowdown in construction, mining and quarrying, as well as in other activities linked to the Panama Canal expansion project. The project came to a virtual standstill in February due to a dispute between the multinational consortium in charge of the project and the Canal Authority. Work did not resume until the parties reached an agreement on 27 February.
On a month-on-month basis, economic activity decreased 1.25% in seasonally-adjusted terms in February, which contrasted the flat reading observed in January and marked a record low. The trend continues to point downward; annual average growth in economic activity fell from 7.8% in January to 7.5% in February, which represented the lowest reading since June 2011.
FocusEconomics Consensus Forecast panelists project that the economy will grow 7.2% in 2014, which is up 0.3 percentage points from last month's forecast. The panel expects GDP to expand 6.5% in 2015.
Author: Carl Kelly, Economist