Forecasts by private consultants and the government agree that in 2011 the Panamanian economy will grow 9% due to the combination of public and private investment, 11.6% and 8% of GDP respectively.

An article by Edith Castillo Duarte in Prensa.com reports the upward shift of the expected growth of Panama’s economy in 2011 by both the government and the consulting firm INDESA, and how estimates of both parties agree. During the first quarter economic growth has already exceeded expectations, reaching 9.7%.

“The former minister and INDESA’s managing partner, William Chapman, said an important factor in terms of total demand in 2011 will be public investment, including works by the Central Government and the expansion of the Canal.
Investment by the non financial public sector could reach 8% of GDP, compared with 6% in 2009.

On the other hand, the Canal expansion represents 4% of GDP this year and is expected to exceed $30 billion by the end of 2011.

Private investment in averaged priced buildings, mainly hotels, commercial buildings, offices and infrastructure, could grow by 11.6%, which would mean a further boost to the economy.

Consumption would be even more dynamic in the domestic market fueled by economic growth, credit, and supplemented by tourism, said the former Minister of Economy during the monthly forum with INDESA’s clients.

Exports, particularly of services, is another sector expected to grow at a rapid pace (10.1%).

Factors that could jeopardize these projections are: a prolonged and widespread conflict in the Middle East, oil prices rising to extremely high levels, a stagnation in the domestic political process, a European financial crisis and a fall in direct foreign investment. “