Panama closed 2023 with an impressive 5 to 6 percent economic growth, marking a significant achievement both regionally and globally.
Yet, 2024 looms with its own set of challenges, especially with the upcoming national elections.
ECLAC projects a 4.2 percent GDP growth for Panama in 2024.
This contrasts with the broader Latin American and Caribbean expectation of slowing growth, down from 2.2 percent in 2023 to 1.9 percent in 2024.
ECLAC’s José Manuel Salazar-Xirinachs attributes Panama’s 2024 growth mainly to construction and services. These sectors drive about 75 percent of the nation’s GDP.
Despite losses from late 2023 protests against a mining concession, official growth forecasts remain optimistic.
The protests, which ended following a court’s ruling, highlighted potential environmental and social concerns.
Felipe Chapman of Indesa anticipates slower 2024 growth due to the mine’s suspension. Yet, he expects other sectors to thrive amid electoral dynamics.
Chapman points out 2024’s economic challenges: water scarcity impacting the Panama Canal, rising interest rates, geopolitical uncertainties, and fiscal issues.
He predicts these factors will dampen consumption and private investment but expects a rebound in 2025 as rates drop.
Unemployment and job formality are key issues
Chapman also separates the mining controversy from Panama’s country risk rating, emphasizing fiscal concerns as the primary worry for rating agencies.
Economist Adolfo Quintero foresees a difficult 2024, with unemployment and job formality as key issues.
However, he’s optimistic about growth potential if Panama leverages its tertiary sector experience and reactivates the Canal’s Development Plan.
Quintero projects a robust 6 percent growth for 2023 and a hopeful 4 to 6 percent in 2024, contingent on wise national decisions.
As Panama strides into 2024, it faces a mix of economic promise and potential perils.
The nation’s ability to navigate these waters will define its economic trajectory and broader stability.