Panama: Economic activity hits three-year low on interruption of Canal expansion project
March 27, 2014
In January, the monthly indicator for economic activity (IMAE, Indice Mensual de Actividad Economica) expanded 6.8% over the same month last year, which was below the 7.8% growth registered in December. The result marked the lowest level since January 2011. According to the National Comptroller's Office, the deceleration was driven by a slowdown in construction, mining and quarrying, as well as other activities indirectly linked to the Panama Canal expansion project. The project had been put on hold temporarily in January amid a dispute between the multinational consortium in charge and the Canal Authority, but it is now up and running again. On a month-on-month basis, economic activity increased 0.21% in seasonally-adjusted terms in January, which was below the 0.29% rise observed in December. Moreover, the trend is pointing downward; annual average growth in economic activity inched down from 8.0% in December to 7.9% in January. 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