Panama: Economic growth accelerates in Q2
October 6, 2014
The economy expanded 6.3% in Q2 over the same quarter of the previous year. The result comes as positive news as it marks an acceleration over the 5.8% rise registered in the first quarter, which had marked the weakest growth rate since Q4 2009.
The expansion was mainly driven by growth in certain areas of the services sector. In particular, real estate expanded 11.9% (Q1: +4.7% year-on-year) and retail increased 4.4% in Q2 (Q1: +2.2% yoy). The financial services sector, which has become an important pillar of the economy, slowed from a 4.4% increase in Q1 to a 2.0% rise in Q2. Growth in transport, storage and communications—which accounts for roughly 20% of economic output—reached 6.8%, which was down from the 7.7% increase recorded in Q1. Meanwhile, construction growth expanded 14.8% (Q1: +16.1% yoy), and mining and quarrying was up 11.6% (Q1: +12.3% yoy). Despite weaker growth rates in both of these categories, the decelerations were much less pronounced than those registered between Q4 2013 and Q1 2014, which suggests that the slowdown in activities linked to the Panama Canal expansion project may be bottoming out. In other news, the fishing industry recorded a massive 50.0% expansion in Q2, which was more than double the 22.8% increase tallied in Q1.
Author: Carl Kelly, Economist