The skyline in Panama City, Panama

Panama Economic Activity December 2023

Panama: Economic activity rebounds in December

Economic activity grew 7.4% year on year in December (November: -2.9% yoy). The rebound stemmed from increasing electricity and water output, improving activity in the hospitality sector and a stronger performance of the recreation sector. That said, the Panama Canal registered larger declines in traffic, cargo volumes and toll revenues which weighed on overall activity.

Meanwhile, the trend improved slightly, with the annual average growth of economic activity coming in at 7.0%, up from November’s 6.9% reading.

Analysts at the EIU commented on the outlook:

“We expect economic growth to slow sharply in 2024, to only 1.7%, based on our view that the Cobre Panamá mine will now remain closed over the forecast period. This also increases the imperative for fiscal consolidation, dampening GDP growth which we forecast will average 4% in 2025-28. Even so, Panama’s growth rate will be much stronger than the regional average of 2.2%, as the country’s strategic location, its openness to trade, its ports and logistics sector, and its international financial sector will attract investors.”

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