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Panama Economic Activity February 2024

Panama: Economic activity growth dips in February

Economic activity grew 0.2% year on year in February (January: +2.2% yoy). Looking at the details of the release, the positive growth was attributed to energy production which continued to expand in the month, as did activity in the hospitality sector thanks to robust tourist arrivals. Less positively, activity in the Panama Canal deteriorated further, albeit at a softer pace compared to January. In addition, activity in the manufacturing, construction and mining sectors weakened.

Meanwhile, annual average economic activity growth fell to 6.0% in February (January: +6.5%), pointing to a worsening trend.

EIU analysts said:

“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. The closure increases the imperative for fiscal consolidation, which will also dampen GDP growth. As a result, we expect an average growth rate of 4% in 2025-28; this will still be much stronger than the regional average of about 2%, as Panama’s strategic location, its openness to trade, its ports and logistics sector, and its international financial sector will attract investors.”

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