GDP in Panama

Panama GDP | Economic News & Forecasts

Panama - GDP

Growth picks up from near decade-low in Q3, but remains hampered by feeble construction sector

According to data released by the National Comptroller’s Office (Contraloría General de la República), the economy regained some steam in the third quarter of 2018 after posting its worst performance in nearly a decade in Q2, but nevertheless remained subdued. Economic growth accelerated from 3.1% year-on-year in Q2 to 3.6% in Q3, following three consecutive quarters of decelerating growth.

The uptick in economic momentum came on the back of quicker growth in the industrial (Q3: +1.8% year-on-year, Q2: +0.3% yoy) and service (Q3: +5.4% yoy, Q2: +4.8% yoy) sectors while, conversely, output in the agricultural sector declined 0.3% (Q2: +3.8% yoy) due mainly to a drop in fishing activity.

Industrial activity notably benefitted from a recovery in the construction sector in the quarter, which had shrunk in Q2 due to a month-long wage strike in April–May. Nevertheless, the construction sector’s performance in Q3 remained much weaker than its long-term average, while growth in manufacturing; and water, gas and electricity supply also slowed from Q2’s modest readings.

On the other hand, the service sector posted its best performance since Q1 2017, buoyed by strong growth in transport, warehousing and communications—a category that encompasses activity in the crucial Panama Canal, as well as ports and airports. Robust shipping and freight activity also supported a marked acceleration of growth in the wholesale and retail trade sectors, which include activity in the Colón Free Trade Zone—the second-largest free-trade zone in the world, located next to the Panama Canal.

Growth in the fourth quarter appears poised to remain subdued by historical standards, as suggested by the weak economic activity reading (IMAE) logged in October, although the construction sector will likely continue its recovery. Looking further ahead, an escalation of the trade war between the U.S. and China could heavily impact Panama’s trade-related sectors as it would likely affect global shipping volumes.

FocusEconomics Consensus Forecast panelists project that the economy will grow 5.0% in 2019, which is down 0.1 percentage points from last month’s forecast. For 2019, the panel expects GDP to expand 4.9%.

Panama - GDP Data

2013  2014  2015  2016  2017  
Economic Growth (GDP, annual variation in %)6.9  5.1  5.6  5.0  5.4  

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Panama GDP Chart


Panama GDP
Note: Annual variation of gross domestic product (GDP) in %.
Source: General Controllership of the Republic of Panama and FocusEconomics calculations.

Panama Facts

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Stock Market4400.0 %Feb 14

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Economic News

  • Panama: Economic activity picks up in November

    January 21, 2019

    The monthly indicator for economic activity (IMAE, Índice Mensual de Actividad Económica) rose from 3.0% in October to 3.5% in November. According to Panama’s Comptroller’s Office (Contraloría General de la República), the increase in economic activity from January to November was largely due to growth in the sectors of transportation, warehousing and communications (which includes activity in the Panama Canal); water and electricity supply; and commerce—notably in the Colón Free Trade Zone.

    Read more

  • Panama: Inflation continues to tumble in December

    January 15, 2019

    Consumer prices fell 0.4% month-on-month in December, matching November’s print.

    Read more

  • Panama: Inflation ticks down in November

    December 19, 2018

    Consumer prices fell 0.4% month-on-month in November, contrasting October’s 0.1% increase.

    Read more

  • Panama: Growth picks up from near decade-low in Q3, but remains hampered by feeble construction sector

    December 18, 2018

    According to data released by the National Comptroller’s Office (Contraloría General de la República), the economy regained some steam in the third quarter of 2018 after posting its worst performance in nearly a decade in Q2, but nevertheless remained subdued.

    Read more

  • Panama: Economic activity softens in October

    December 17, 2018

    The monthly indicator for economic activity (IMAE, Índice Mensual de Actividad Económica) fell from 3.8% in September to 3.0% in October. According to Panama’s Comptroller’s Office (Contraloría General de la República), the increase in economic activity from January to October came on the back of growth in the sectors of transportation, warehousing and communications (which includes activity in the Panama Canal); water and electricity supply; and commerce—notably in the Colón Free Trade Zone.

    Read more

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