IMF says Panama’s economy will grow by 12.5% this year

The report notes that potential risks to the Gross Domestic Product (GDP) growth of Panama, a country whose economy depends on services and logistics, lie in the "disruptions to capital and trade flows around the globe" due to the ongoing pandemic.

, IMF says Panama’s economy will grow by 12.5% this year

RIO DE JANEIRO, BRAZIL – The International Monetary Fund (IMF) described Panama’s economic “outlook” as “optimistic” and forecasts a 12% growth for 2021, after a 17.9% drop due to the pandemic last year, the Panamanian government informed on Wednesday.

In the final statement of the virtual mission in the framework of the Article IV consultation, the IMF indicated that “the growth forecast for the Panamanian economy in 2021 is 12%, underpinned by the momentum of the vaccination program, full-scale copper production and the recovery of private investment”.

Panama has applied 849,376 doses of covid-19 vaccines under the national immunization program that began last January 20. The government has said it aims to vaccinate the vast majority of the population this year after consolidating a portfolio of 9.2 million doses.

Panama Canal. (Photo internet reproduction)
Panama Canal. (Photo internet reproduction)

An eventual slowdown in globalization could also affect the pace of Panama’s recovery, which would negatively affect Canal and logistics sector activity.

“As a hedge against these potential external shocks, Panama requested a two-year Precautionary and Liquidity Line, which was approved by the IMF Board of Directors in January 2021, for an amount equivalent to 500 percent of quota,” the Ministry of Economy and Finance (MEF) said in its statement.

The IMF mission considers that the development of the national capital market will increase the sources of financing and the prospects for greater and more inclusive growth, said the official statement.

On the permanence of Panama in the list of countries with deficiencies in the fight against money laundering, the MEF said that the multilateral recognized the commitment of the Panamanian authorities to get out” of the list elaborated by the Financial Action Task Force (FATF), in which the country was reinserted in 2019.

The multilateral suggested Panama “continue to improve national statistics to ensure adherence to international standards on data quality and dissemination”.