Panama: Economic activity records largest decline in over two years in November
Economic activity dropped 2.9% year on year in November (October: +5.1% yoy). The outturn marked the worst reading since February 2021. Protests due to the contested concession deal of the Cobre Panama copper mine to a Canadian firm amid environmental and economic concerns froze activity and drove November’s plunge in activity. A sharper deterioration in Panama Canal activity—including lower cargo volumes and toll revenues—further weighed on the economy. In addition, construction activity shrank due to low implementation of public and private investment in infrastructure.
Meanwhile, the trend pointed down, with the annual average growth of economic activity coming in at an over two-year low of 6.9% in November, down from October’s 7.9%.
Analysts at the EIU commented on the outlook:
“We expect economic growth to slow sharply in 2024, based on our view that the Cobre Panamá mine will remain closed for much of the year. […]. 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. Canal revenue helps to buoy public works, which also explains Panama’s comparatively strong performance.”