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OPINION: Panama’s failing competitive  grade

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The fall in the global competitiveness index, a tool that seeks to identify and compare the ability of countries to provide development opportunities to their citizens, deserves the attention of the present authorities and those who aspire to replace them after 2019. Some years, only Chile was located above Panama. Today, a handful of countries in the region obtain better results than ours. The fall in itself is alarming because it is observed in almost all the aspects analyzed, but it is even more so if we take into account that Panama’s gross domestic product has been growing at a faster pace than the economies of the countries that today outperform us in this index. That has only one reading: Panamanians have not known how to take advantage of wealth. We have not transformed it into stronger institutions or better-trained citizens. We have not invested enough in science and technology. In summary: we have grown more than we have progressed. Let’s take note and, instead of distracting ourselves by looking for justifications, we propose to improve these results.-LA PRENSA, Oct. 17


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Low Investment Expectations

In Panama, 77% of companies do not plan to make new investments during the fourth quarter of the year, and 38% do not intend to hire more employees.

Friday, October 19, 2018

According to a survey conducted by the Center for Economic Studies of the Chamber of Commerce of Panama, 10% of the companies surveyed expect to increase staffing, 50% will remain the same, while 2% do not know.

In this regard, the president of the National Council of Private Enterprise (Conep), Severo Sousa, told Panamaamerica.com.pa that "... Historically, a pre-electoral year is one of recession and, under these conditions, it will be difficult for companies to be able to increase their payrolls, but rather they will take care of the ones they have and in some cases reduce them in order to face the fall in income that they are having."

Sousa added that "... This in turn will result in the economy flowing more slowly, because having more people on the street with no income is less expenditure they can make and less money flowing."



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Construction in Panama: Negative Figures Continue

In the first nine months of 2018, the cost of new construction, additions and repairs decreased 40% with respect to the same period in 2017, reaffirming the trend shown since last year.

Thursday, November 1, 2018

The latest figures from the General Comptroller detail that between January and September of this year the cost of new constructions, additions and repairs totaled $991 million, and the number of projects for which construction permits were granted was 7,557.

You may be interested in "Central America: $760 Million in Hospital Projects"

The figures for the first nine months are far from those reported up to September last year, when the value of the projects was more than $1,641 million, and the number of projects exceeded 10,000.

Also see "Public Works: $1.1 Billion in New Projects"

During the first nine months of this year, Panama was the most expensive province in terms of new construction, additions and repairs, with a total of $637 million and 964 thousand square meters. It was followed by La Chorrera, Arraijan and Colon, with $89 million, $81 million and $77 million, respectively.

See report of the General Comptroller.



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Panama's economy grows by 3.7% in the first half of 2018

Wed, 11/07/2018 - 14:01


Panama's economy grew by 3.7 percent in the first half of this year, compared to the same period in 2017, driven by transport, financial intermediation and trade sectors, according to data from the National Institute of Statistics and Census (Inec) released today.

The growth shows a clear slowdown compared to the rate of 5.8 percent of the first half of 2017, a behavior that has been attributed to a slowdown in key sectors, including construction, which experienced a one-month strike for wage claims between last April and May.

An International Monetary Fund (IMF) mission said last October in the Panamanian capital it estimated that the Panamanian gross domestic product (GDP) would expand by 3.7 percent in the first half of this year.

The multilateral institution added in a preliminary report, after undertaking a visit to the country, that "despite the temporary slowdown in 2018, the economy is on track for a rebound in the short term and will remain among the most dynamic economies in Latin America."

Panama’s  Inec stated that the highest accumulated growth in the first semester was recorded by fishing (15.2 percent); transport, storage and communications (7.3 percent); wholesale and retail trade (3.9 percent); financial intermediation (3.9 percent); agriculture, livestock, hunting and forestry (3.7 percent); electricity, gas and water (3.3 percent); and real estate activities (3 percent).

Construction grew 2 percent; mine and quarry exploitation by 2 percent, and the manufacturing industry by 1.6 percent, while hotel and restaurant sector recorded a contraction (-3.2 percent) and taxes on net products of subsidies (-2.7 percent).

Inec said that GDP expanded by 3.1 percent in the second quarter of this year, compared to the same period of 2017, and registered an amount of 10,084.3 million dollars.

Between April and July, the activities related to domestic economy that had a positive performance were transportation and communications; financial intermediation; trade; government services; health and education.

Meanwhile, the external activities that showed increases in the second quarter are the Panama Canal, the Colon Free Zone trade, air transport and fishing.

On the other hand, the negative trends in the second quarter were shown in construction; mining and quarries; hotels and restaurants, and agriculture.

The Panamanian government said last July that this year's growth forecast is around 4.5 percent, below 5.4 percent in 2017, while business associations have estimated GDP growth for this 2018 around 4 percent.



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Panama Shipyard Fires 40 Workers

The gate of dry dock one was damaged by causes not attributable to Mec.
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The immediate  firing of 40 employees by  the  Mec Shipyards consortium , which operates the Balboa shipyard,  on November 6, as part of a restructuring process to mitigate “significant losses” is seen as another indication of the slowing of the  Panamanian economy while President Varela and a group of businessmen are in Shanghai trying to drum up business and assessing what the effect  the trade war between the US and Canada, the Canal’s biggest users might have on the local economy.

A statement from Mec said that this is “due to the difficult economic situation faced by the Balboa shipyard and of with timely notification to the authorities, given that it is a concession contracted with the State through the Maritime Maritime Authority of Panama (AMP) “.

Mec had agreed with the AMP an addendum to the concession contract between the State and the consortium, signed in 2012 by the previous  administration, to modify two clauses that sought to reduce the duration of the contract, which was for 20 years, and the fixed fee for lease, which was agreed at $99.1 million during its term. However, the addendum was not endorsed by the Comptroller General of Panama.

In the statement, the consortium indicates that although two years ago Mec requested an economic balance that would allow it to sustain the company and preserve its workforce, “has not found an answer to overcome this difficult situation.”

The consortium based the request on the fact that, after rehabilitating the shipyard which was received in deplorable conditions and recovering the national image for the provision of its services, the shipyards sector was severely affected by the crisis in the maritime industry.



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Inflation remained unchanged in September in Panama with 0.8%

Thu, 11/08/2018 - 16:35

Diseño sin título_1.jpg

Panamanian inflation remained unchanged in September with respect to the previous month and the accumulated inflation since January remained at 0.8 percent, while year on year it stood at 1.4 percent, according to data from the National Institute of Statistics and Census (Inec) released today.

The statistical entity said that the Consumer Price Index (CPI) for September did not reflect variation with respect to August, while compared to the same month of 2017 it was 0.8 percent.

The groups that showed increases in the CPI for September with respect to August 2018 were alcoholic beverages and tobacco with 0.6 percent; Miscellaneous goods and services with 0.3 percent; furniture, household items, as well as restaurants and hotels, both with 0.1 percent.

The food and non-alcoholic beverage groups; housing, water, electricity and gas; health and education remained unchanged, the Inec said, while clothing and footwear groups showed a negative -0.7 percent; communication (-0.2 percent); transportation and recreation, and culture, both with - 0.1 percent.

The statistical entity noted that when comparing the CPI of September 2018 with 2017, there were increases in education (3.7 percent); alcoholic beverages and tobacco, and restaurants and hotels, both 2.5 percent; and transportation with 1.9 percent.

There were also increases in the various goods and services groups (1.0 percent); health (0.9 percent); housing, water, electricity and gas (0.7 percent); furniture, household items (0.6 percent), and recreation and culture (0.1 percent).

The groups that showed decreases in the study period were clothing and footwear (-1.4 percent); communications (-0.8 percent), and food and non-alcoholic beverages (-0.2 percent).



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Construction permits are greater than building space in Panama

Wed, 12/05/2018 - 09:09

Diseño sin título (4).jpg

The Panamanian Chamber of Construction (Capac) began a very complex 2018 in construction matters, stating that the last month will be even worse the first quarter of 2019.

This analysis is based mainly on the figures released by the Comptroller General Office, noting that until October of this 2018, there is a considerable decline of 21.8% in construction permits, additions and repairs of housing projects. This percentage is established based on the figures for 2017, showing that the country's projections for housing have declined; in fact, when comparing figures in money, in 2017 the figure was $ 167.6 million and this 2018, $ 131.1 million.

Despite higher revenues in non-residential projects (+ 9.1%), the decline in residential projects (-30.0%) is a considerable burden in the numbers of the industry, so that construction ceases to be a profitable business within the trade and Panamanian work arena.

Areas such as Colón, La Chorrera and Panama recorded increases in demands and/or projects in non-residential constructions, while in Aguadulce, Arraiján, David and Santiago demands began to decline. However, the revenues left positive numbers for the construction companies’ coffers.

Meanwhile, residential projects increased in Aguadulce, Chitré, Colón and Santiago, but the drop in areas such as Arraiján, David, La Chorrera and Panama, left red numbers in the accounts and considerable losses for the end of 2018 in Panama.

Along with this, the world of building permits suffers an oversupply of projects, with up to 441% more, which has no space to know that the increase in areas to build (per square meter) only increased by 1%. In short, the permits obtained are infinitely greater than the spaces to do so, which is a considerable obstacle.

According to information in La Estrella de Panama, a CBRE report suggests that the availability of the residential market increased from 7.1% to 8.2%, while the sale of homes (built and in process) decreased from 92.3% to 87.4%.

How is it possible for availabilities to go up, sales drop and even so, projects increase? The first factor may be the economic growth of the country, which for Héctor Ortega, president of Capac, affected a lot after not reaching the projected 5% (it will close at 3.2% -3.5%). In the same way, he urges to remember that construction has been a great contributor to Panama's GDP, so another factor could be the little recognition of this sector within the Panamanian administration.

Ortega regarded the construction business as cyclical, so those involved are optimistic within this area and have met constantly to reactivate it, emphasizing the need for planning and certain changes that must be applied within the projects that exist so far.

One of the proposals for the Government of Panama is to raise the top of the preferential interest rate for houses up to $ 150 thousand, something that with the necessary bank guarantee, will increase production and reliability in the construction sector.

With the negotiations between China and Panama on the horizon, it is not ruled out that the fourth (or hypothetical fifth) round of negotiations for the FTA includes points referring to the subject, whether in labor, technology, resources or several points, on the verge of 2019, the changes in construction within Panama can be constant and significant soon.

In fact, from now certain changes can be seen, such as the construction of the fourth bridge over the Panama Canal, just under Chinese investment that begins to arrive with the treaties that began in mid-2017 and that now begin to lay important foundations to the point of having received Xi Jinping in Panama, sealing import exchanges with national production and also with companies from this growing country hand in hand with the Asian exchange.



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Panama: Slight Increase in Unemployment Rate

Between August 2017 and the same month in 2018, the rate of open unemployment in the country rose from 4.8% to 4.9%, and Colon and West Panama were the provinces where the highest levels of unemployment were registered.

Thursday, December 6, 2018

According to the latest Labor Market Survey, compiled by the General Comptroller, the percentage of open unemployment increased from 4.8 in August 2017 to 4.9 in August this year. For women their percentage remained constant at 6.3, and for men an increase of 0.2 percentage points was observed, from 3.7 to 3.9.

The report details that of the 96,623 people who declared to be in open unemployment, the most was the young population (15 to 29 years old) with 61.9%, 35.6% were between 30 and 59 years old and a small percentage was 60 and older (2.5%).

According to the document, the largest decreases in the number of employed persons by category of economic activity were reported in Water Supply; Sewerage, Waste Management and Sanitation Activities (27.2), Electricity, Gas, Steam and Air Conditioning Supply (10.4) and Real Estate Activities (7.8). Meanwhile, percentage increases were observed in the employees in the categories: Mining and quarrying (67.4), Other service activities in the tertiary sector (20.2), Social and human health-related services (19.0) and Information and communication (17.9).

Percentage increases in the urban area were presented by area of residence of the employed population in the following economic activities: Mining and quarrying (63.2), Social and human health-related services (19.7); while activities such as water supply, sewerage, waste management and sanitation activities registered decreases of around 26.7.

See full report.



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Investment  in building permits plummets 49%

Investment in building permits in Panama in the first nine months of 2018 fell 49%  to its lowest level in six years reported Panama’s  Chamber of  Construction (CAPAC) on Tuesday, December 11. "From January to September of 2018, the investment was $758 million, while in the same period last year the amount reached $1 496.2 billion


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