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Panama gets 2nd rating boost

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Posted 30/04/2019

Panama got another rating boost on Monday, April 29 from The rating agency  Standard & Poor's Global Rating which improved the country’s sovereign rating from BBB to BBB +.

This is the second improvement received so far this year, after the Moody's agency made a similar move in March, raising the Baa2 rating to Baa1.

With this jump, Panama is at the level of countries such as Mexico and Peru and is only below Chile (A +) in the region

The rating of risk is an opinion of the agencies on the ability and willingness to pay the debt that a country or a company has.

S & P said the improvement is a consequence of years of growth, which raised per capita income, the diversification of the economy and a relatively low level of public debt.

 

https://www.newsroompanama.com/business/panama-gets-2nd-rating-boost

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Panama's Risk Rating Improves

Arguing that the country has a diversified economy which has contributed to sustained GDP growth, Standard and Poor´s raised the rating from BBB to BBB+, with a stable outlook.

Tuesday, April 30, 2019

Economic diversification has also allowed per capita income to double in the last decade, one of Standard and Poor's arguments for raising the rating.

You may be interested "Positive Outlook for Panama's Debt"

From the Ministry of Finance of Panama statement:

- Standard and Poors considers the diversification of the economy to be positive, which has contributed to double the GDP per capita.

- The country's trajectory in terms of orderly change of administration, continuous pro-investment economic policies and economic growth has been valued.

- Panama stands out with a sustainable growth of the economy above the peer countries with investment grade.

- The rating agency expects the next administration to continue recent efforts to strengthen regulation, fiscal policy and transparency.

- Since 2012, it is the second time that Panama manages to improve the investment grade rating this year, Moody's did it first.

The rating agency Standard and Poor´s has improved the rating of the Republic of Panama from BBB to BBB+ with a stable outlook. "This rating is the result of the sustainable economic growth in recent years that Panama has experienced, above peer countries; the diversification of the economy, doubling the GDP per capita; stability in the changes of administration; and efforts to strengthen the transparency and regulations of the financial system," announced Minister Eyda Varela de Chinchilla, Minister of Economy and Finance.

Read full article (In Spanish).

 

https://www.centralamericadata.com/en/article/main/Panamas_Risk_Rating_Improves_1

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Panama: The Most Dynamic Economy

According to the IMF, the Central American country has been the most dynamic economy in Latin America in the last three decades, reaching one of the highest per capita incomes in the region.

Monday, May 13, 2019

A report published by the International Monetary Fund (IMF), and signed by Alejandro Santos, Panama's mission chief, and Metodij Hadzi-Vaskov, chief economist in the Western Hemisphere Department, explains that the country's growth is important, since the economy has grown at around 6% per year for a quarter of a century, well above other countries with traditionally strong growth such as Chile, the Dominican Republic and Peru, as well as twice the growth rate of Latin America as a whole.

Panama also achieved one of the highest levels of per capita income in the region, surpassing other countries such as Argentina, Mexico and Uruguay.

In the last thirty years, GDP per capita quintupled from about $5,000 in 1990 to over $25,000 in 2018, foreign trade and the financial system prospered, and public debt contracted in proportion to GDP. In addition, poverty was greatly reduced, while investment reached levels similar to those of the Asian tigers.

One of the recommendations for the country is to improve financial transparency, the exchange of tax information and the investment climate. By further strengthening financial transparency and integrity, Panama could benefit even more from its exceptional geographical location and regional financial center to support investments in international logistics, transport and trade and in a financial core.

See full report.

 

https://www.centralamericadata.com/en/article/main/Panama_The_Most_Dynamic_Economy

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IMF predicts Panama 6%  rebound

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Posted 16/05/2019

Members of the Executive Board of the  International Monetary Fund (IMF) met with  President Juan Carlos Varela , the Minister of Economy and Finance, Eyda Varela de Chinchilla, and representatives of Panama’s financial and business community during  a three-day official visit that ended on Thursday, May 15 .

At the end of the mission, the directors issued a statement that Panama's economic model as a logistic, trade and financial center has positioned the country as one of the most dynamic economies in the region.

"Successful policy frameworks, free trade, high investment, the emergence of a vibrant service sector and the expansion of the Panama Canal" are highlighted as a reflection of the "solid economic foundations of the country,"said the bulletin.

The IMF projects that Panama will grow 6% in 2019  in what would be a considerable rebound from 3.7% in 2018.

To settle the "good economic prospects", the agency expects fiscal discipline to be maintained, as well as efforts to improve the fight against money laundering and financing of terrorism and tax transparency.

The Executive Board of the IMF is the body in charge of the daily management of the body. It consists of 24 members, who in turn represent several countries.

The delegation consists of Alexandre Tombini, executive director for Panama, Brazil and nine other countries; Zhongxia Jin, director for China; Thomas Ostros, director for Sweden; Maher Hamed Mouminah, director for Saudi Arabia; Sami Geadah, deputy director for Lebanon, and Piotr Trabinski, deputy director for Poland.

Panama does not have any financial assistance or support program with the IMF reports La Prensa, . However, the agency has collaborated with the country by providing technical assistance and capacity development in order to strengthen the supervisory capacity of economic authorities and modernize the administration and control of income.
 

https://www.newsroompanama.com/business/imf-predicts-panama-6-rebound

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Panama economy up 3.41% in first quarter

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Posted 21/05/2019

The Panamanian economy grew 3.41%  in the first quarter of the year when compared to the same period of 2018. according to the Monthly Index of Economic Activity (IMAE) from the office of the Comptroller General

According to the official report, transport, storage, and communications, electricity and water, public administration and financial intermediation were the segments of the economy that recorded a favorable performance from January to March.

The electricity and water supply category, in its production, showed a positive result due to the greater generation of thermal energy and the contribution of the new generation of energy from natural gas.

Activities that showed growth at a slower pace were construction, mining and quarrying, agriculture and livestock, and the provision of amusement and leisure services.

 

https://www.newsroompanama.com/business/panama-economy-up-341-in-first-quarter

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Less Economic Growth, More Fiscal Deficit

The low dynamism in the commercial activity and in the construction, will influence so that in 2019 the growth of the Panamanian economy is of 4.5% and not 5%, which would result in a rise in the fiscal deficit.

Monday, May 27, 2019

The Chamber of Commerce, Industry and Agriculture of Panama (Cciap) expects that by 2019 the country's economy will grow 4.5%, an estimate that is lower than that of the Ministry of Economy and Finance (MEF) which forecasts that economic growth will reach 5%.

See "Panama: Slight Economic Slowdown"

Manuel Ferreira, director of the Center for Economic Studies of the Chamber of Commerce Industries and Agriculture of Panama (Ceecam), explained to Elcapitalfinanciero.com that "... among the sectors which have maintained a greater dynamism are..: The Canal, the ports, the air hub, telecommunications services and the financial sector. Meanwhile, there was less favorable behavior in the activities of the domestic economy, in the areas of trade, construction and real estate activities, among others."

Ferreira added that "... even though economic growth for 2019 will be around 4.5%, surpassing 3.9% in 2018, this presents a serious problem for the next government to fulfill its promise to pay the debt of the State with its suppliers of goods and services and to give continuity to the public investment program contemplated in the State Budget in order to reactivate the economy."

Also see "Panamanian Public Debt Grows at 9%

If the business sector forecasts are fulfilled, the fiscal deficit will be greater than that projected by the government, since the official estimates for 2019 were made on the basis that the economy will grow 5%.

 

https://www.centralamericadata.com/en/article/main/Less_Economic_Growth_More_Fiscal_Deficit

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Approved construction projects plunge 25%

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Posted 06/06/2019

The value of approved construction permits in the principal areas  of Panama fell to  $242.5 million in the first quarter of the year,  a fall of 25.5% over the $ 325 million  in the same period of the previous year.

The decline, however, is  more moderate than that registered the previous year, when in the first quarter the declared value fell by 39.9% when compared to 2017.

The report of the  Comptroller General includes residential and non-residential projects (hotels, offices, industrial) of the main districts of the country, except San Miguelito, and does not include public works.

 

https://www.newsroompanama.com/business/approved-construction-projects-plunge-25

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Registration of New Companies Keep Falling

In Panama, during the first four months of 2019, 4,314 corporations were registered in the country, 8% less than those reported in the first quarter of 2018.

Monday, June 10, 2019

The latest report of the General Comptroller of the Republic details that between the first quarter of last year and the same period of 2019, the number of corporations registered in the country went from 4,692 to 4,314.

Regarding dissolved corporations, a decrease was also reported for the periods concerned, from 2,693 in 2018 to 2,138 in 2019, equivalent to a reduction of 21%.

In the case of merged corporations also recorded a decline, in this area was 34%, down from 140 in the first quarter of 2018 to 93 in the same period this year.

See full statistics.

 

https://www.centralamericadata.com/en/article/main/Corporations_Registration_Keep_Falling

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PPPs to Boost the Economy

For Panama's business sector, public-private partnerships are contracts that, if properly implemented, could promote the dynamism of the economy and at the same time diminish the fiscal pressure on the State budget.

Monday, June 10, 2019

The Chamber of Commerce, Industries and Agriculture of Panama has promoted since the beginning of the current government administration, a draft bill that creates the Public-Private Partnership Regime (PPP), given that this document would promote the development of the country, explained the business guild through a statement.

You may be interested in "Public-Private Partnerships: Where Would They Work Better?

The implementation of PPPs in the country is one of the initiatives that we have been proposing some time ago to promote the reactivation of the economy, which was a reason for satisfaction when this guild was invited to participate, along with other private sector groups, a meeting at the Inter-American Development Bank (IDB) with the designated head of Public Works, to review the draft and the observations that were presented at the time to the current administration of government, the document states.

The statement concludes that "... Our union considers that the APP scheme offers great opportunities for the country to attract foreign capital investment that will allow it to generate greater sources of employment, and thereby reduce the fiscal pressure on the State coffers.

In addition, it would promote the participation of local capital in works of public interest in all the national geography, in order to boost even more vigorously the performance of the Panamanian economy."


 

https://www.centralamericadata.com/en/article/main/PPPs_to_Boost_the_Economy

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Panama growth slowed  but rebound forecast

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Canal revenue continues to grow

Posted 18/06/2019

As Panama’s outgoing administration prepares to hand over the reins to President-elect Cortizo a report from the Comptroller’s Statistics and Census o revealed that in the first quarter of the year the real gross domestic product (GDP) was 3.1%., down from 4% in the last two quarters of 2018.

The GDP is an indicator that measures the added value of the products and services generated in the country. To eliminate the distorting effect that inflation could generate, prices are brought to a constant value (in this case to the value of 2007).

After having registered a rebound in the last two quarters of 2018 following  the construction strike in  April and May, the period January-March 2019 shows a slower growth of activity

The sector that grew most in the quarter was the supply of electricity, gas, and water, with a rate of 5.6%, explained by a thermal generation that increased by 161%.

Financial intermediation grew by 4.7% due to the performance of the international banking center, which recorded a growth of 4.3% with an increase in the portfolio of internal loans to the private sector, especially the mortgage portfolio and personal consumption. In addition, the activity of insurance companies reported an increase of 8.2%, due to the increase in net premiums.

The transport, storage and communications group recorded an increase of 4.3%.

The transport, storage and communications group recorded an increase of 4.3%.

Construction grew 4.5% due to public and private infrastructure works, mainly roads, ports, mining and natural gas projects, among others, said the entity of the Comptroller General of the Republic.

Real estate activity grew 3% due to the sale of homes built in previous periods.

Canal Operations
The operations of the Panama Canal reported an increase of 6.3%, as a result of higher revenues from tolls and the services provided by the Canal to the ships. In addition, the port system increased its added value by 4.2% due to the greater movement of containers (3.8%), general cargo (51.9%) and bulk cargo (3.2%).

On the negative side, the weak performance of manufacturing industries stand out (with a fall of -0.9% with respect to the same period of 2018); community activity, where the performance of games of chance and casinos (-2.6%) and fishing, which records a fall of 39.9%, is computed.

The Ministry of Economy and Finance (MEF) prepared the general budget of the State for this 2019 based on a projection of economic growth of 5.9%. As expectations have not been met, the MEF lowered the projection to 5.3%.

 A  rebound is expected,  in the second half of the year with  as there will be more activity in large-scale works such as the construction of the fourth bridge over the Panama Canal, the expansion of the Inter-American Highway between the Bridge of the Americas and San Carlos, the start of the export of the Donoso copper mine  the construction of the new children’s hospital. and the greater capacity for air transport of the Tocumen international airport.

 

https://www.newsroompanama.com/business/panama-growth-slowed-but-rebound-forecast

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Bank Credit: Positive Outlook for Panama

For Moody's, the expansion of the Panamanian economy forecast for the next few years would allow bank credit to grow 8% in 2019 and 9% in 2020.

Monday, June 17, 2019

According to estimates by analysts of the rating agency Moody´s Investors Service is that for the 2019-2014 five-year period is that the Panamanian economy will achieve growth between 5% and 5.5%, behavior that will favor the dynamism of the banking sector.

See "IMF: Panama will Grow 6% in 2019

José Montaño, vice president and senior analyst of Financial Institutions Group Moody´s, explained to Elcapitalfinanciero.com that "... the expectation of higher growth of the Panamanian economy will contribute to expand bank credit by 8% in 2019 and 9% in 2020. Banking is well positioned in terms of capital, profitability, asset quality and overall to continue growing."

Ana Lorena Carrizo, head of risk analysis of Equilibrium, associated to Moody´s, stated that for the Panamanian banking sector the "... main challenges are...: Control levels of delinquency, increase deposit taking, improve profitability levels, maintain a robust capital adequacy and adequate liquidity indices and adjust to new regulatory standards."

You may be interested in "Panama: Bank Credit Keeps Rising

Regarding the current performance of bank credit, the latest reports of the Superintendence of Banks of Panama specify that up to March 2019 the credit portfolio of banks in the national system totaled $54,857 million, 5% more than in the same month of 2018, and the rise was again explained by mortgage and personal loans.


 

https://www.centralamericadata.com/en/article/main/Bank_Credit_Positive_Outlook_for_Panama

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Construction Rebound: A Challenge for the New Government

In Panama, the elected government will have among its main challenges to facilitate the necessary conditions for the reactivation of construction in the country, which has reported negative figures for the last two years.

Thursday, June 20, 2019

Since the beginning of 2017 investments in construction in the country have decreased and the situation does not seem to improve. Data from the Office of the General Comptroller of the Republic detail that the performance of the construction sector in 2018 was negative, as the cost of new construction, additions and repairs totaled $1,311 million, a figure 39% lower than the $2,144 million reported in 2017.

The beginning of 2019 is still marked by the downward trend, since in the first quarter of this year construction costs reached $322 million, 28% less than what was reported in the same period of 2018.

See "Real Estate Market is Saturated?” and "New Investments in Construction

Faced with this situation, directors of the Panamanian Chamber of Construction (Capac), have made representations to Inés Samudio, new head appointed to head the Ministry of Housing and Land Management.

Among Capac's main requests is the increase in the amount of the Preferential Interest Law for housing construction from the current $120,000 to $150,000. This is not the first time that this measure has been proposed, since in November 2018, the sector guild already contemplated it.

Regarding other proposals, Laestrella.com.pa states that "... They also proposed to the incoming minister to update the leasing law as a new business model and to evaluate the construction of leased buildings. In addition, they promoted lease-purchase to get out of existing inventories."

The article adds that "... the guild suggested to the new authorities to use more efficient construction systems and give attention to maintenance programs for public sector works, as well as pumping systems, water treatment plants, wells and water storage tanks."

 

https://www.centralamericadata.com/en/article/main/Construction_Rebound_A_Challenge_for_the_New_Government

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Adverse Outlook for Panama's economy

After the country was put back on the FATF grey list, the private sector believes that investments will be driven away and economic growth will face multiple obstacles.

Tuesday, June 25, 2019

After the Financial Action Task Force (FATF) decided to include the country in the list of nations that need to be supervised in the process of implementing measures to prevent money laundering and the financing of terrorism, entrepreneurs from different sectors foresee that the effects will be negative for the local economy.

See "Panama is Back on the Gray List

Panamaamerica.com.pa reviews that "... Luis Eduardo Pimentel, president of the Panamanian Association of Real Estate Brokers and Promoters (Acobir) explained in the morning news of Telemetro Reporta that the perception of Panama will be affected internationally by the inclusion in the gray list, which will undoubtedly scare away investors."

On the other hand, the Banking Association of Panama (ABP), explained through a statement that "... being on discriminatory lists has real negative effects. The country's reputation, which is tarnished by membership of this list, discourages foreign investment and the confidence of the international financial system in the many advantages offered by Panama. This often translates into obstacles to economic growth, the creation of more and better paid jobs, financing conditions and the general welfare of the entire population." See full ABP press release.

These forecasts are given in the midst of an economic slowdown, since between February and March of this year the year-on-year variation of economic activity in the country fell from 3.7% to 2.9%, and during April the rise was again at 2.9%.

 

https://www.centralamericadata.com/en/article/main/Adverse_Outlook_for_Panamas_economy

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Panama: Construction Falls by 28%

At the end of the first quarter of 2019, the cost of new construction, additions and repairs fell 28% compared to the same period in 2018.

Wednesday, June 26, 2019

The latest data from the General Comptroller of the Republic details that only in April of this year the cost of new construction, additions and repairs totaled $79 million, an amount that is 36% lower than that reported in the same month of 2018.

You may be interested in "Construction: Upcoming Projects in the Region"

Between the first quarter of 2018 and the same period in 2019, the total cost of construction went from $449 million to $322 million, which is equivalent to a fall of 28%.

Also see "Cement: More Business between Central America and Mexico

In January and April of this year, Panama was the province that recorded the highest cost of new construction, additions and repairs reported, with a total of $175 million. Arraijan and Colon followed, with $34 million and $29 million, respectively.

Regarding gray cement production, the report indicates that for the periods concerned there was a decrease of 13%, dropping from 597 thousand tons in the first four months of 2018 to 518 thousand tons in the same period of 2019.

See report of the General Comptroller of the Republic.

 

https://www.centralamericadata.com/en/article/main/Panama_Construction_Falls_by_28

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Construction: Activity Falls, But Wages Rise

From July 1, the second increase in the minimum hourly wage for construction workers in Panama comes into effect, which occurs in a context of considerable decline in the sector's activity.

Friday, June 28, 2019

The increase is part of the Collective Bargaining Agreement CAPAC-Suntracs, whose negotiation ended a strike that in 2018 lasted more than 30 days. According to official figures at the end of the first four months of 2019, the cost of new construction, additions and repairs fell 28% compared to the same period in 2018.

You may be interested in “Construction Rebound: A Challenge for the New Government" and "Panama: Construction Falls by 28%"

From the Capac statement:

On July 1, the second minimum wage increase enters into force in accordance with the Collective Bargaining Agreement CAPAC-Suntracs, which regulates labor relations between 2018 and 2021.

"It is a gradual adjustment of the agreed salary increases and as practice has been, the CAPAC fully complies with the terms agreed with the workers' representatives," said Hector Ortega, president of the construction guild.

The new adjustment will apply to CAPAC members in the category of general and specialized contractor and to companies that, regardless of their classification, execute construction works as subcontractors of the guild members, according to Clause 3 of the Collective Bargaining Agreement.

Read full statement (In Spanish).

 

https://www.centralamericadata.com/en/article/main/Construction_Activity_Falls_But_Wages_Rise

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Construction in Panama: Better Expectations

President Cortizo announced the implementation of a plan that contemplates expanding the preferential interest rate for homes with prices of up to $180,000.

Tuesday, July 9, 2019

During his inauguration, Laurentino Cortizo announced that he will implement a plan to reactivate the construction industry, which includes the extension of the preferential interest in different ranges for housing up to $180,000, the presentation of a real estate leasing bill and exemption from transfer tax for the current inventory of housing, among other actions.

See "Construction Rebound: A Challenge for the New Government

The announcement was well received by the builders' guild. In this regard, Hector Ortega, president of the Panamanian Chamber of Construction (Capac), explained to Elcapitalfinanciero.com that "... the proposal to raise the benefits of the Preferential Interest Law for homes whose sale price rises to $180,000 'will allow serving an important segment of the population made up of professionals and middle class, who regularly do not receive any type of stimulus or facilities for the purchase of residences'."

For Miguel De Janón, president of the National Council of Housing Promoters (Convivienda), "... the measures announced by President Cortizo to reactivate the construction sector can have a positive impact on the placement of the high volume of houses that are built and have not been able to be placed in the market, however, he clarified that in the case of the extension of the benefits of the Preferential Interest Law to homes with a market value of up to $180,000, it is necessary to wait to know exactly the scope of the proposed reform to the Law to be able to measure its possible benefits."

Construction in Panama is not passing its best moment, since at the close of the first quarter of 2019 the cost of new construction, additions and repairs fell 28% compared to the same period in 2018.

 

https://www.centralamericadata.com/en/article/main/Construction_in_Panama_Better_Expectations

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Unemployment in Panama Increases to 6.4%

Up to March of this year, the total unemployment rate reached 6.4%, above the 5.8% reported at the end of March 2018.

Thursday, July 11, 2019

When analyzing by area, urban showed a 7.2% rate in the third month of 2019, which is higher than that recorded in rural areas, whose rate was 4.2%, reported the General Comptroller of the Republic.

The report states that "... the rate of participation of women in economic activity was lower than that of men. An equally unfavorable condition was reflected in the female unemployment rate, which by March 2019 was 8.2% versus 5.0% observed for men.

The highest total unemployment rate was observed in young people aged 15 to 19 (19.4%). However, this began to decline from the age group of 20 to 24 years until reaching its lowest value in the group of people 60 to 69 years (1.9%).

According to the percentage distribution by province, the highest rates were in Colon (7.5%), West Panama (6.5%) and Panama (6.4%), while for the provinces of Herrera, Darien, Los Santos and the indigenous regions, the lowest rates were presented
."

See full report.

 

https://www.centralamericadata.com/en/article/main/Unemployment_in_Panama_Increases_to_64

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Panama Consumer Confidence at 8-year High

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Manuel Ferreira, from CCIAP, and Adolfo Gaffoglio, CEO of Ipsos for Central America and the Caribbean.

Posted 17/07/2019

Panama consumer confidence of the regarding the future of the country of employment, home and savings within the next 12 months is positive says a survey  conducted with the support of the Chamber of Commerce, Industries and Agriculture (Cciap)

At the end of  June, the confidence index reached 129 points, up 26 lines with from  the report carried in July last year. 

"These are values that were not obtained since January 2016," said Adolfo Gaffoglio, CEO of  the Ipsos polling company.   for Central America and the Caribbean.

The most significant growth is registered in the consumer's perception of the country's economic situation for the next 12 months. It  climbed 42 points, the highest in the last eight years.

 

https://www.newsroompanama.com/business/panama-consumer-confidence-at-8-year-high

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Construction: Poor Performance Continues in Panama

From January to May 2019, the cost of new construction, additions and repairs totaled $404 million, 26% less than the same period in 2018.

Friday, July 19, 2019

The latest report of the General Comptroller of the Republic details that only in May of this year the cost of new constructions, additions and repairs totaled $82 million, 17% below the figure for the same month in 2018.

You may be interested in "Construction: Upcoming Projects in the Region"

Between the first five months of 2018 and the same period in 2019, the total cost of construction increased from $548 million to $404 million, a 26% decrease.

Also see "Cement: More Business between Central America and Mexico

From January to May of this year, Panama was the province with the highest cost of new construction, additions and repairs reported, with a total of $219 million. Arraijan and Colon followed, with $50 million and $30 million, respectively.

Regarding gray cement production, the report indicates that for the periods concerned there was a 9% decrease, falling from 705 thousand tons in the first five months of 2018 to 640 thousand tons in the same period of 2019.

See report of the General Comptroller of the Republic.

 

https://www.centralamericadata.com/en/article/main/Construction_Poor_Performance_Continues_in_Panama

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Labor Hiring Falls 12% up to June 2019

During the first six months of the year, 116,187 work contracts were registered in Panama, 12% less than the figure reported in the same period in 2018.

Monday, July 22, 2019

The latest report of the Ministry of Labor and Labor Development details that between January and June 2018 and the same period in 2019, the types of indefinite contracts registered a decrease, falling from 38,436 to 28,845.

Ministerial reports explain that defined-term labor contracts also registered a decrease for the periods concerned, dropping from 57,032 to 50,830, and in the case of determined work increased slightly from 36,434 and 36,512, respectively.

With regard to the proportion of temporary work contracts, which takes into account those of a defined type and by finished work, their proportion of the total for the periods in question increased from 71% in 2018 to 75% in 2019.

See full figures for the first four months of 2018 and 2019.

 

https://www.centralamericadata.com/en/article/main/Labor_Hiring_Falls_12_up_to_June_2019

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Economic Activity Fails to Recover

After the year-on-year variation of economic activity in Panama fell from 3.7% to 2.9% between February and April, the indicator dropped to 2.4% in May.

Wednesday, July 24, 2019

Some of the categories of economic activity that showed good performance were: transportation, storage and communications, financial intermediation, public administration and electricity and water, informed the General Comptroller of the Republic.

The document states that "... Transport and communications services showed a positive behavior, thanks to the operation of the expanded Panama Canal, the movement of containers of the National Port System in TEU and telecommunications.

The category of electricity and water supply showed positive results because of the greater generation of thermal energy with the contribution presented by the new generation of electricity from natural gas.

Other activities showing slower growth were: construction, mining and quarrying, real estate activities, commerce and hotel and restaurant services.
"

See full report.

 

https://www.centralamericadata.com/en/article/main/Economic_Activity_Fails_to_Recover

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Panamanian Economy to Grow Less

Because of the weakening of the construction and services sectors, the IMF reduced the economic growth projection for Panama from 6% to 5% this year, forecasting a "slow recovery.

Monday, July 29, 2019

The fundamental aspects of the Panamanian economy remain solid, and is expected to recover and next year reach its potential growth of 5.25%, with inflation approaching 2% in the medium term, explained the international agency.

You may be interested in "Panama: IMF Reduces Growth Projections

From the IMF statement:

July 23, 2019. A staff team of the International Monetary Fund (IMF), led by Alejandro Santos, visited Panama during July 17-23, 2019, invited by the Panamanian authorities. At the end of the visit Mr. Santos issued the following statement:

“While Panama remains among the most dynamic economies in Latin America, the economic recovery has been slower than anticipated. Real GDP grew at an annual rate of 3.1 percent in the first quarter of 2019 (compared to 4 percent in the same period of last year), due to a softening in construction and services. More recent data point to a continuation of a sluggish recovery, leading us to revise down our growth projection for 2019 to 5 percent (from 6 percent estimated in our February visit). Panama’s fundamentals remain solid, with the economy expected to recover and converge to its potential growth of 5½ percent by next year, and inflation edging up to 2 percent over the medium-term. The banking system remains well-capitalized and liquid with low non-performing loans. The external position will continue strengthening over the medium term. The balance of risks to the outlook is tilted to the downside, related to fears of rising trade protectionism, weaker global outlook, and potential pressure on banks’ correspondent relations.

“Preliminary data indicate a decline in fiscal revenues and an acceleration in the implementation of budgetary spending, leading to a fiscal deficit in the first half of the year above the 2 percent of GDP limit established by the fiscal rule for the whole year. In addition, sizable arrears accumulated to suppliers and banks which need to be cleared. The authorities estimate that in the absence of corrective measures, the fiscal deficit could reach almost 4 percent of GDP in 2019. The authorities are committed to corrective measures but fear that a rapid pace of implementation could weaken the ongoing recovery further. Against that background, the authorities expect to reduce the fiscal deficit by over 2 percent of GDP in the next two years, allowing them to observe the deficit limit under the fiscal responsibility law of 1¾ percent of GDP by 2021.

“In June 2019, the Financial Action Task Force (FATF) placed Panama on the list of countries with strategic deficiencies on its anti-money laundering framework. Despite recent progress on financial integrity, including the recognition of tax evasion as a predicate offense to money laundering, the legal framework needs to be further strengthened and its effectiveness needs to be demonstrated. The authorities are fully committed to implementing the recommendations of the action plan agreed with the FATF and aim to be out of this list as soon as it is possible. Sustained efforts to enhance the anti-money laundering framework and tax transparency will be crucial to strengthen Panama’s position as a regional financial center.

“Sustaining inclusive growth over the medium term will require reinforcing the structural reform agenda, especially in education, social security and public health services. Further improvements in fiscal revenues and stricter expenditure controls will be required to improve macroeconomic management, create the necessary fiscal space to cover the cost of future reforms, and strengthen fiscal discipline. We encourage the authorities to upgrade the statistical framework to facilitate sound economic decision making at all levels of government.”

 

https://www.centralamericadata.com/en/article/main/Panamanian_Economy_to_Grow_Less

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Construction Fell 23% up to July 2019

Construction activity does not recover in Panama, since from January to June 2019 $510 million were reported in new constructions, additions and repairs, 23% less than in the same period of 2018.

Friday, August 2, 2019

According to data from the General Comptroller of the Republic, in June of this year the cost of new constructions, additions and repairs totaled $106 million, 7% below the figure for the same month in 2018.

You may be interested in "Construction: Next Investments in Central America

Between the first six months of 2018 and the same period in 2019, the total cost of construction increased from $662 million to $510 million, which is equivalent to a 23% drop.

Also see "Cement: More Business between Central America and Mexico

From January to June of this year, Panama was the province with the highest cost of new construction, additions and repairs reported, with a total of $287 million. It was followed by La Chorrera, Arraiján and Colón, with $74 million, $55 million and $42 million, respectively.

See report of the General Comptroller of the Republic.

 

https://www.centralamericadata.com/en/article/main/Construction_Fell_23_up_to_July_2019

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Labor Contracting Still Declining in Panama

From January to July of this year, 136,417 work contracts were registered in the country, 12% less than the figure reported in the same period of 2018.

Tuesday, August 13, 2019

The reports of the Ministry of Labor and Labor Development detail that between the first seven months of 2018 and the same period of 2019, the types of indefinite contracts registered a decrease, dropping from 44,833 to 33,914.

Ministerial reports explain that defined-term labor contracts also registered a decrease for the periods concerned, falling from 66,212 to 60,102, and in the case of determined work increased slightly from 43,610 and 40,401, respectively.

In relation to the proportion of temporary work contracts, which takes into account those of a defined type and by finished work, their proportion of the total for the periods concerned increased from 71% in 2018 to 75% in 2019.

See full figures for the first four months of 2018 and 2019.

 

https://www.centralamericadata.com/en/article/main/Labor_Contracting_Still_Declining_in_Panama

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Panama economy 4% growth, foreign investment surging

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Posted 17/08/2019

The Panamanian economy is reflecting a growth of 4%, for 2019 smaller than the 4.5 predicted at the beginning of the year but foreign investment continues to surge says a Chamber of Commerce  (CCAIP)  economic report.

The Center for Economic Studies (CEECAM) reported that the economic indicators analyzed in Economic News are for  January to July of this year, as well as the results of surveys of expectations of companies and consumer confidence.

A Business Survey of members shows that for the third quarter of 2019, 35% of entrepreneurs indicate that their sales and income would increase, while 27% think they would decrease and 36% expect it to remain the same.

Manuel Ferreira, director of Economic Affairs of the Chamber, said that this result reveals the expectation of a slightly positive sales increase against a negative expectation in the previous quarter, which could be indicating the start of a rebound in economic activity with a view to a better situation in 2020.

Likewise, the Consumer Confidence Index (ICC) survey reflected a substantial increase of 26 points, which is an indication that consumers, like entrepreneurs, are optimistic, which will represent greater growth for the economy in 2020. Ferreira

The report shows that the amount of direct foreign  investment in 2018 was $5.548 billion, a growth of 21% and that this year it is still growing similarly with an increase of 18% in the first quarter of 2019, which indicates that Panama not only remains the largest foreign capital collector in Central America (with a 47% stake), but also that it remains very dynamic.

The economist mentioned that, although there is a slowdown in national economic activity at this time, CCIAP has positive expectations of future growth that will be strengthened starting in 2020.

 

https://www.newsroompanama.com/business/panama-economy-4-growth-foreign-investment-surging

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