The International Monetary Fund projects an estimated growth of 3.7% for the Panamanian economy in 2010. While this percentage is much lower than percentages say for 2007 and 2008 where growth averaged 8%, it is still solid growth in this uncertain economic climate. Based on these number issued by the IMF Panama will lead Latin America’s GDP growth for the next five years starting in 2010.
This quick recovery for Panama is based on the diverse nature of its economy which is basically a service economy with a strong, banking center, the Panama Canal, and a a huge logistics hub with ports in both oceans.
A recent report from the World Economic Forum ranked Panama’s banking center as 29th in the world and the number one banking center in Latin America based on the growth prospects and the security of the banking center plus growth perspective overall for the country.
The construction industry is also chugging along. While banks in Panama, being conservative in the face of the tremendous economic slowdown, have tightened loan requirements they are still making bridge loans for ongoing construction projects. Construction credit at the close of August of this year reached $1.172 billion, representing a $408.4 million increase or 53.5% versus the same period in 2008. There is an even bigger increase in loans for infrastructure projects where the loan amount reaches $268.18 million, an increase of 77.9% versus last year
Banks are being very cautious on loans to new projects without seeing first a significant amount of pre-sales.
On the tourism sector growth remains steady. From January to July 2009, 900,064 visitors entered Panama a decrease of 1.2% versus the same period last year. It is important to note that although there was a decrease the amount of income generated by these visitors had a minimum increase of 0.2% totaling USD 803.2 million as compared with the same period last year. Mr. Salomon Shamah, the Minister of the Panama Tourism Authority thinks by the close of 2009 the tourism numbers should at least equal those of last year.
Even though Panama has weathered the crisis seemingly much better than other countries plans are still underway to strengthen the tourism sector such as incentives for developing tourist areas in the interior, improvements to the passenger entry system at Tocumen International Airport, and plans to build new airports in the interior such as in Cocle.
It is apparent that in spite of the economic slowdown Panama is still moving forward at a rapid speed. Major infrastructure projects are underway, tourism, as an important sector of the economy, is being studied and plans have been made for sustainable growth, the construction sector is still being backed by banks and the banking center while being more conservative in its investments and in issuing loans and credits is still very solid.
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