The biggest concern for Panama, one of Latin America’s fastest-growing economies in the past decade, is the currency devaluation hitting its larger neighbors to the south, President Juan Carlos Varela said in an interview at Bloomberg’s office in New York.

Besides its namesake canal, Panama’s service-based economy relies heavily on travel and commerce, anchored by airline and cargo company Copa Holdings SA and the Colon Free Trade Zone. With a 35 percent drop in the real and the Colombian peso weakening 24 percent so far this year, there are less Brazilians and Colombians traveling to and shopping in Panama, Varela said.

“Panama is a great tourist destination for Colombians and Brazilians, and now it’s more expensive for them to travel,” Varela said. “For any Brazilian tourist it costs twice as much now because of the devaluation of the currency.”

Restoring diplomatic ties between the U.S. and Cuba will bring some new tourists and shoppers to Panama, though it won’t be enough to make up for the Brazilians and Colombians staying home, Varela said. He said Copa Airlines has cut flights to Brazil and now has seven daily flights to Havana.

“How the U.S. handles this relationship is going to impact a lot,” Varela said. “We expect this new private sector that is emerging in Cuba to become an important customer for the free zone in Panama. We expect them to travel to our country.”

Panama’s economy is expected to grow 6 percent this year, according to analysts surveyed by Bloomberg, propelled in part by a $5.25 billion canal expansion expected to be finished next year.