The country has experienced a remarkable recovery, far surpassing the rest of the region. Horacio Estribi In 2022, growth reached 15.8%, while in 2021 it was 10.8%. In addition, growth is expected to remain between 5% and 6% this year, above the regional average, said Horacio Estribi, advisor to the Ministry of Economy and Finance (MEF).
This growth has been achieved along with a low level of inflation and a recovery of formal employment, said the economist, who highlighted the achievements made by Panama in its process of economic recovery after the pandemic.
It has been possible to reverse the negative trend in terms of the public sector deficit that began to be noticed during the pandemic. The growth of spending has been reduced, especially current spending, which in 2022 was reduced by 4%, while state revenues have increased. These indicators point to a frank recovery of the economy, according to Estribí.
Although solid growth is expected this year, it will not be at the same rate as in 2022 and 2021. However, indicators, such as the growth of the Monthly Economic Activity Index (IMAE), predict growth above the regional average. Concrete examples of this growth include a 24% increase in car sales and an 80% increase in occupancy permits in the construction sector during the first quarter compared to the previous year. In addition, the Canal’s toll revenues have increased by 17%.
The advisor stressed that Panama is consolidating its role as a safe center for the attraction of foreign direct investment. In addition, the Panamanian economy benefits from its low inflation, the use of the dollar as legal tender and the tax facilities offered to foreign investors.
Likewise, it is approaching formalization and leaving the international gray and blacklists, which will contribute to attracting more investment and reducing the costs of financing the public debt.
As for employment, Estribí mentioned that they are waiting for the results of the census to determine the level of unemployment in 2023 compared to previous years. However, he indicated that an improvement in formal employment has been observed, which has increased as a proportion of total employment. The goal is to continue on the path of economic growth and promote the generation of sustainable employment, especially in the private sector.
Although the sectors that will lead economic growth in 2023 are not yet clearly established, according to Estribí, in 2022 the key sectors were: construction, commerce, logistics and international transport, where the Panama Canal plays a fundamental role. These sectors have boosted the process of consolidation and economic recovery of the country.