Panama forecasts 5% economic growth in 2022

The Panamanian government maintains conservative forecasts of economic growth of around 5% by 2022, according to the Minister of Economy and Finance (MEF).

The Panamanian economy grew 13.6% in the first quarter and the Monthly Index of Economic Activity (IMAE) to June grew 13.2%.

In addition, Panama has one of the highest gross domestic products (GDP) per capita in the region and in recent years, Panama has been converging with advanced economies by consolidating its competitive advantages and expanding new sources of growth.

The head of the Finance portfolio said that no sector of the country represents more than 20% of GDP, but rather that it has a well-diversified economy, stating that the GDP in 2022 is higher than the levels seen before the pandemic which reflects a strong economic recovery.

The minister commented that this recovery is manifested in the strong performance in tax collection. As of August, current revenues have increased 13.5% compared to August 2021. Tax revenues grew almost 21% compared to August 2021. Sales tax (ITBMS) grew almost 25%, showing a strong consumption .

Meanwhile, Panama Canal toll revenues have increased steadily since 2019, growing 5% in August 2022 compared to the same period in 2021.

The International Monetary Fund, the World Bank and ECLAC have indicated that Panama will grow more than regional peers.

He also stated that Panama debt has also been declining since 2009 from 6.6% to 3.9% in 2022, which even with the recent rate increases by the United States Federal Reserve (FED) have had a low impact on the cost of debt, given that more than 80% of it is contracted at fixed rates. In addition, the average maturity term is almost 14 years, which minimizes the risk of refinancing.

Meanwhile, in the Panama Canal, income from tolls, cargo volume and ship traffic continue to show a positive trend, with levels higher than those prior to the pandemic. The Canal is the main contributor and for this year contributions of around $2,400 million are expected, a significant increase compared to last year.