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Panama and the challenge of maintaining its economic model in 2018

The entities with the highest budget allocation, according to estimates, are the Ministry of Health (18%), Education and Culture (11%), Security (9.5%), Housing and Land Use Planning (3.4%) and Labor (0.40%)
  • EFE

The National Assembly held in the last week of July 2017 the projection of what would be the national budget for 2018.

The Ministry of Economy and Finance (MEF) introduced the bill of the General Budget of the State for B /. 23,397.1 million for 2018, a figure that represents an increase of 7.9% compared to 2017.

This proposal is based on the expectation of an economic growth of 6% of GDP for the fiscal period 2018.

The entities with the highest budget allocation, according to estimates, are the Ministry of Health (18%), Education and Culture (11%), Security (9.5%), Housing and Land Use Planning (3.4%) and Labor (0.40%).

According to the Organization for Economic Cooperation and Development (OECD) despite economic growth in traditional economic activities (Panama Canal, financial, trade and construction sector), these activities are increasingly limited and unable to be sustained on their own.

The OECD states that the economic model based on physical investments begins to show levels of depletion and deterioration; and, of course, the alternatives, as it is known, are focused on human capital investment and decent employment. Employment that is only possible in a diversified economic matrix.

The key concept according to the OECD in its study on Panama is the exhaustion of the growth model based on physical investments and the need to seek new growth engines capable of compensating a social structure that already exhibits strong levels of fragmentation and that, simultaneously, has the capacity to overcome its own vulnerabilities.

According to the agency, the economic conformity lies on the promotion of the growth of low technological level and little innovation (excluding the Canal) as the only option possible.

The OECD establishes that policies aligned with the economic growth of the country should be applied so that development can be undertaken beneficially by 2018.

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