Panama will grow by 5.6%, the highest rate of economic growth in the region, ahead of the Dominican Republic and Costa Rica, according to data updated by the Executive Commission for Latin America. The data, poses challenges for the country of the Isthmus.
Panama will grow by 5.6%, the highest rate of economic growth in the region, ahead of the Dominican Republic (5.3%) and Costa Rica (4.1%), according to data updated by the Executive Commission for Latin America.
The ECLAC's projection for Panama is slightly lower than forecasts of the Ministry of Economy and Finance and of the International Monetary Fund, which in both cases estimates a growth of 5.8%.
Panama will grow at a rate above 2016 (4.9%) and also above the projection that the agency had in April (5.2%).
The ECLAC expects growth in construction, transport and communications and financial intermediation services.
The increase in revenues since the third set of locks of the Panama Canal entered into operation in June 2016 will contribute to the greater economic dynamism. There is also a contraction in the adjusted deficit of the non-financial public sector, due to the increase in tax collection, control over current expenditure and contributions from
the Canal, while inflation will remain around 1%.
The ECLAC recalls that last year Panama left the gray list of the Financial Action Task Force after updating its legal framework for the prevention of money laundering and the financing of terrorism.
In addition, it reviews other legal adjustments and commitments acquired by the country to improve financial transparency, such as the approval of the agreement between Panama and the United States to implement the Fiscal Accountability Act on Foreign Accounts (Fatca), which involves the sending of financial information on US citizens to the tax authorities of their country.
The agency noted that the case of the firm Mossack Fonseca "had a marginal effect on the economic and financial activity of the country."
For the continent as a whole, the ECLAC estimates a growth of 1.1% in 2017 after two consecutive years of economic contraction.
The Economic Commission for Latin America and the Caribbean (ECLAC) forecasts that the economies of Mexico and Central America will grow an average of 2.5% throughout the year, which will be possible thanks to growth expectations of the United States, which is its main trading partner.
The report shows that for South America the growth of the Gross Domestic Product will be 0.5%, while the Caribbean economies could grow to 1.2%. Positive rates are expected for all countries in the region except for Venezuela, Saint Lucia and Suriname.
The factors that will help the economies of the region to grow will be the recovery of the world economy, the slight recovery of trade also in the world and the increase in prices in commodities, which could be 12% above the prices recorded last year.
In terms of spending, there is a trend towards greater investment and more dynamism of private consumption. The average current account balance is expected to remain at levels similar to those of last year.
With regard to international trade, the average growth of exports will be 8%.
The international agency continues to seek new development alternatives. In fact, the ECLAC has organized an event on sustainable development