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Economic Activity Restarts Upward Trend

After registering a fall from 3.7% to 2.4% between February and May of this year, the year on year variation rate of economic activity in Panama stood at 3% up to June.

Thursday, August 22, 2019

Among the categories of economic activity that showed a favorable performance are: transportation, storage and communications, financial intermediation, public administration, mining and quarrying, agriculture, electricity and water and domestic services, informed the General Comptroller of Panama.

The document states that "... The transportation and communications services presented a positive behavior, thanks to the operations of the expanded Panama Canal, telecommunications and air transport.

The electricity and water supply category registered 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 that showed smaller scale growth were: trade, construction and community activities.
"

See full report.


 

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

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Panama real estate downturn includes commercial properties

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Lots of space for rent

Posted 07/09/2019

Panama’s real estate boom which included commercial stores and warehouses is over and the oversupply of houses and apartments is matched by commercial properties.

The proposal of president  Cortizo to increase the coverage of preferential interest for housing, currently under discussion in the  National Assembly, is a measure that seeks to re-ignite the sector. However,  says TVN there is also a considerable inventory of commercial premises, offices, and warehouses.

“We handled figures that ranged from between500,000  and 600,000 square meters. Remember that Panama is also a country that has been blessed by its geographical position, ”said Luis Pimentel, president of Acobir.

There are free zones whose occupation in previous years was 100%. Now, it only reaches 70%. Local rentals above $20 per square meter are not being rented.

“There is an oversupply of commercial premises at the moment because their construction began with a different economic situation from the one we are currently going through. The slowdown we see in Panama is also reflected in Latin America and the export destinations of our products, ” Aida Ureña De Maduro, a member of the Board of Directors of the Industrial Union of Panama told TVN

Entrepreneurs ask the government for incentives for foreign investment so that Multinational Company Headquarters are established in the country. They clarify that this requires that Panamanians are qualified to work in the companies.

the strategies of entrepreneurs is the adjustment of rents, moving to smaller spaces or commercial strategies such as converting shopping centers into outlets, with discounted products to encourage sales.

Although the impact is more marked in the capital city, they explain that the oversupply feels the same in the rest of the country.

 

https://www.newsroompanama.com/business/panama-real-estate-downturn-includes-commercial-properties

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Panama: Hiring Expectations Do Not Rebound

For the fourth quarter of 2019, 11% of companies in the country expect to increase their payrolls, which is less than the 13% recorded in the same period of 2018.

Thursday, September 12, 2019

Panamanian employers report slight hiring expectations for the last quarter of 2019. The 11% anticipates an increase, 6% anticipates a decrease and 81% does not foresee changes, resulting in a Net Employment Trend of +5%, explains the Manpower report.

The document states that "... Employers in two of the four regions anticipate an increase in their workforces over the next three months. The strongest labor market is expected in the West, where the Net Employment Trend stands at +9%. Some hiring is expected in Panama City with a +6% trend. However, employers in the Central Provinces and Colon expect to decrease their workforces, reporting Trends of -6% and -3%, respectively.

Employers in four of the six sectors expect to increase their workforces during the next quarter. The strongest hiring pace is anticipated by Service employers, who report a Net Employment Trend of +10%. A moderate hiring pace is also anticipated in Construction and Communications & Transportation with Trends of +8%. Manufacturing employers expect slow hiring activity, reporting a +3% Trend, while weak labor markets are reported in Commerce and Agriculture, Fisheries, Mining & Extraction, where Trends stand at -1%
."

See full report.

 

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

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Panamanian GDP Up 3% in the 2nd Quarter 2019

During the second quarter of the year the constant GDP totaled $10.498 million, 3% more than that reported in the same period of 2018, explained by the activity of transport and trade.

Tuesday, September 17, 201

The General Comptroller of the Republic reported that activities related to the domestic economy performed positively this quarter: transportation and communications, commerce, construction, financial intermediation, government services, health and education.

The report states that "... On the other hand, the manufacturing industries and other community and personal services presented negative behaviors.

Among the values added by activities related to the rest of the world that showed increases, the Panama Canal, air transport, agricultural items such as bananas and melons stood out. The activities developed in the Colon Free Zone and fishing registered a decrease.

The Gross Added Value of the agricultural sector registered an 8.4% increase, because of the growth of the production of fruits, among them bananas and melons that showed in their exports increases of 121.7% and 26.2%, respectively, due to the reactivation of the banana production in the Baru area. Rice production grew by 0.1% and corn by 2.8%, due to the effect of the area sown and harvested. The production of watermelon and pineapple decreased their exports by 30.7% and 1.3%, in that order. At the same time, the hectares planted and harvested of sugar cane decreased.
"

See full report.


 

https://www.centralamericadata.com/en/article/main/Panamanian_GDP_Up_3_in_the_2nd_Quarter_2019

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Panama gets “must do” list to consolidate development

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Posted 25/09/2019

The Inter-American Development Bank (IDB) has presented Panama's Finance Ministry   with  a “must do” action list to consolidate the country's development.

A report  presented to the technical team of Investment Programming and Public Policies of the Ministry of Economy and Finance (MEF) says  that the country must optimize competitiveness, diversify the economy, strengthen the education system and the skills of the workforce, improve institutional quality and achieve a balanced territorial development if it wants to remain a high-income country.

 “The analysis carried out by the IDB serves as the basis for designing the route that will allow the

country to sustain the dynamism of its economy, achieve greater modernization of the productive

apparatus and incorporate citizens and territories that have lagged behind,” said the MEF.

Based on the challenges identified in the study, MEF technicians will be able to propose policy measures in sectors such as work, welfare, water and sanitation, competitiveness, education, logistics and transport, tourism, energy, science and technology, health and administration of justice.

“For the IDB, Panama has important assets such as the logistics conglomerate, financial strength and macroeconomic stability that gives investors confidence, as well as security, strategic connectivity and the cosmopolitan aspect that Panama City has acquired,  ”said the MEF.

 

https://www.newsroompanama.com/business/panama-gets-must-do-list-to-consolidate-development

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Panama among fastest-growing Latin American economies

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Posted 10/10/2019

The World Bank forecasts a growth of 4.5% for Panama this year and places the country among the fastest-growing economies in Latin America in 2019 and 2020.

By 2020 and 2021 an economic expansion of 4.6%. If the predictions are confirmed, the national economy would be picking up from the 3.7% registered in 2018.

To achieve this, however, a boost in economic activity will be necessary in the second half of the year, since in the first six months the domestic product Gross (GDP) grew 3% reports La Prensa.

This year, Panama would only be surpassed in the region by Dominica (9.6%) and Dominican Republic (5.3%), while the countries of Central America would have a lower performance, with Honduras growing 3.3%, Costa Rica 2% and Nicaragua registering a 5% decline in its economy. Meanwhile, the major economies of the region will have a slight growth or decrease. Brazil will grow 0.9%, Mexico 0.6%, while Argentina will decrease by 3.1%.

The limited activity will be reflected in the growth of the Latin American and Caribbean region as a whole, which will grow 0.8% in 2019 and will rebound to 1.8% in 2020.

"After the rapid growth derived from the high prices of raw materials in the first decade of the 21st century, the region is in a stage of low performance," said Martin Rama , chief economist at the World Bank for Latin America and the Caribbean.

 

https://www.newsroompanama.com/business/panama-among-fastest-growing-latin-american-economies

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Private sector hiring down 14.3 % in first nine months

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Posted 23/10/2019

Hiring and replacements in the private sector fell 14.3%  in the first nine months of 2019 compared to the same period last year, according to figures from the Ministry of Labor and Labor Development (Mitradel).

During the period, about 170,875 contract signatures were filed at the Mitradel headquarters, 28,731 fewer labor agreements, compared to the same period last year when 199 606 hirings were reported.

The contracts reflect not only the creation of jobs, they also cover staff turnover between one company and another.

Some labor market surveys projected that with the change of administration under  Laurentino Cortizo hiring in private sector companies would improve during the last months of 2019, but this has not been the case reports La Prensa. 

The moderation in the growth of hiring would be reflecting the uncertainty of employers regarding the future negotiation of the new minimum with a December deadline, the culmination of large projects, and the new way of doing business, with the digitalization of processes and structural changes in sectors that participate in internal trade.

The latest report of the Comptroller indicates that the private sector employs 47.63% of the employed population. Meanwhile, 29.23% of the workforce in the country choose to work independently.

Temporary contracts continue to lead the local labor market. Of the 170,875 work agreements closed until September, 75% are for a fixed time, while the remaining 25% are jobs for an indefinite period.

Construction and commerce remain the two economic activities that add the most workers to their payrolls.

 

https://www.newsroompanama.com/business/private-sector-hiring-down-143-in-first-nine-months

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Casino gambling bets  continue downward trend

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Posted 26/10/2019

.Data from the  Board of Control of Games (JCJ) indicate that between January and August, $4.225 billion were wagered, which leaves a difference of $45,000 compared to the numbers in the same period last year. The amount does not include sales  of the National Charity Lottery.

Of the total wagered until August, $1. 116 billion was paid in prizes, leaving a gross income to the gambling operators of $259.6. Operating companies say that the 5.5% tax that was established in 2015 to finance the increase to retirees and pensioners scared away important international players who now prefer to go to other destinations in the region.

Manuel Sánchez Ortega, executive secretary of the JCJ, said the statistics reflect a 47% drop in gambling table bets since the tax was established 4 years ago. He said  that12 workers are needed per day, for each game table and, the reduction in the level of bets has meant the loss of many jobs. 

Of the amount wagered until the month of August, $75.6 million were made in-game tables. The figure reflects a year-on-year fall of 15%, while wagering on slot machine rooms type A fell 2.6% to $277 million.

Bets on sporting events were only ones that registered a positive balance. They rose 13.2% to $33.6 million.

 

https://www.newsroompanama.com/business/casino-gambling-bets-continue-downward-trend

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Labor Hiring Fails to Improve in Panama

From January to August of this year, 267,235 employmentcontracts were registered nationwide, 9% less than the figure reported in the same period of 2018.

Friday, October 25, 2019

The reports of the General Comptroller of the Republic detail that between the first eight months of 2018 and the same period of 2019, the types of contracts defined registered a decrease, falling from 128 thousand to 124 thousand.

Ministerial reports explain that indefinite labor contracts also registered a decrease for the periods in question, falling from 70,000 to 56,000, and in the case of determined work decreased from 96,000 to 87,000.

Regarding 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 report.


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

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Bank of America’s  predicts lower Panama growth

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Posted 01/11/2019

The bank Bank of America Merrill Lynch estimates that Panama’s economic growth over the next year will be 3%, a rate below the 3.5% predicted  for this year and clashes with a Moodys’ report.

The bank has lowered its economic outlook for Panama, both in 2019 and 2020 and describes this year, as "disappointing" in almost all economic metrics.

A recovery of the economy had been  expected after a 3.7% growth in 2018, the lowest since the international financial crisis of 2009.

The bank also refers to a deterioration in the fiscal balance, a situation that, in its opinion, represents a  ratings risk The analysis does not match that made by Moodys which ratified Panama's rating and stable outlook.

 

https://www.newsroompanama.com/business/bank-of-americas-predicts-lower-panama-growth

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Economic Recovery May Be Delayed

Although Panamanian businessmen recognize that in the first months of the Cortizo administration there have been advances that could improve the performance of the local economy, it is predicted that the reactivation could take longer than expected.

Tuesday, November 5, 2019

The gradual elimination of price control, the creation of the PPP regulatory framework and greater flexibility in preferential interests in the housing market are the most important advances that the productive sector has recognized to the Cortizo government.

These changes seek to achieve economic reactivation, which should be reflected in the level of growth of the economy, which is estimated to be between 3% and 3.5% at the end of 2019, according to the latest forecasts of Moody's agency.

Andy Espinosa, economic advisor of the Industrial Union of Panama (SIP), told Elcapitalfinanciero.com that "... the growth of GDP at the end of 2019 will not exceed 3%, very different from the 4 or 5% predicted by international financial institutions, which is not enough to reactivate the economy and meet the country's needs mainly in terms of jobs. The positive is that measures are being taken to reactivate the economy, 'we believe that if there is a favorable environment for investment and business, that the economy will be reactivated little by little in the coming years, but not at the speed we would like."

Samuel Moreno, president of the National College of Economists, explained that "... the projects that really generate economic movement and employment, in terms of multipliers, are the mega-projects, so we hope that works on the third line of the subway and the fourth bridge over the Canal will begin soon, so that by the end of 2020 we can improve our growth by 4 or 5%. We also hope that the activity of the banana industry and the export of copper reaches its maximum capacity, as well as the culmination of works such as the Pacific cruise port, the Amador convention center and the port on Margarita Island, Colon, can generate new jobs."

According to official figures, during the second quarter of the year Panama's constant GDP totaled $10.498 million, 3% more than that reported in the same period of 2018, explained by the activity of transport and trade.

 

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

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Which Economy Will Grow Most This Year?

In its latest update of economic growth projections for 2019, ECLAC estimates that the Dominican Republic will close the year with a 5% increase, followed by Panama, which would reach a growth rate of 3.7%.

Thursday, November 14, 2019

According to economic growth projections for Latin America, which were estimated by the Economic Commission for Latin America (ECLAC) and updated in November, the Dominican Republic will be the country in the region that will increase its production the most this year.

It is followed by Panama with 3.7%, Guatemala with 3.3%, Honduras with 2.9%, El Salvador with 2.2% and Costa Rica with 1.8%. In the case of Nicaragua, the international organization estimates that the economy will contract by 5% by the end of 2019. See full updated table.

For the economies of Central America and Mexico, meanwhile, is expected an expansion rate of 0.7% for 2019 and 1.6% for 2020, values that imply a reduction with respect to the average growth rate observed since 2014 in this subregion, states the statement issued.

 

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

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Panamanian Economic Activity Accelerates

During September 2019, the Monthly Economic Activity Index reported a 4% year-on-year variation, higher than the registered in August, when it rose to 3.2%.

Thursday, November 21, 2019

Among the categories of economic activity that showed a favorable behavior were: commerce, transportation, storage and communications, financial intermediation, agriculture, public administration, construction, electricity and water, exploitation of mines and quarries, and domestic services, informed the General Comptroller of the Republic.

The report explains that "... Transport and communications services showed favorable performances, because of the operations of the expanded Panama Canal and the movement of containers of the National Port System in TEU.

The agricultural sector registered an increase in items such as cattle breeding and the cultivation of bananas, melons and watermelons, mainly for export.

The electricity and water supply category showed a good performance because of the greater generation of thermal energy with the participation of the new generation of electricity from natural gas.

The commercial activity registered positive results, because of the demand of the local wholesale and retail trade.
"

See full report (in Spanish).


 

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

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Panama unemployment rate hits 7.1 percent

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Job fairs get longer lines

Posted 01/12/2019

Panama’s unemployment rate has climbed to 7.1% with 146,111 seeking work , says a report by the Comptroller General published this week.

Last year, there were 118,888 unemployed people in the country, which means that in a year at least 28,000 peole have  joined the ranks of the unemployed with jobs in the hotel and restaurant industry particularly hard hit  by the fall off in tourism.

The workforce also grew by 80,000 from 1,986,000 to 2, 066 000, (80,000 more) between August 2018 and the same month this year.

The majority of the unemployed seek employment on average four times a month, without success, according to the Comptroller's report.

 

https://www.newsroompanama.com/business/panama-unemployment-rate-hits-71-percent

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Panama: Labor Hiring Falls to 15%

From January to October of this year, 188,015 work contracts were registered in the country, 15% less than the figure reported in the same period of 2018.

Friday, November 29, 2019

The reports of the Ministry of Labor and Labor Development detail that between the first ten months of 2018 and the same period of 2019, the types of indefinite contracts registered a decrease, falling from 62,635 to 47,234.

Ministerial reports explain that defined-term labor contracts also registered a decrease for the periods in question, falling from 96,020 to 86,267, and in the case of determined work fell from 63,798 and 54,514, respectively.

With respect 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/Panama_Labor_Hiring_Falls_to_15

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