Panama Canal Facing Difficult Times
- During a meeting with members of Civil Society and the media, the administrator of the Panama Canal, Ricaurte Vásquez, said that the interoceanic highway one of the country's main assets "is going through difficult times."
- The canal charges by tonnage, not by transit, and statistics are being reflected where there is more traffic of small vessels, which consequently represents less tonnage and, in turn, lower collections.
- The Panama Canal Authority reiterated that the use of the water depends on the number of transits in the Canal and that a greater volume of it is being used, at a time when the waterway is generating less income. For context, every time a ship traverses the Panama Canal, about 50 million gallons of water has to be poured into the Canal’s locks—the three-stage system that gradually raises ships for their 50-mile journey across the Panamanian isthmus. Meanwhile, there will be a decrease in the number of containers that will pass through the Panama Canal, due to economic conditions in the world.
- This comes at a time when Panama's GDP is largely linked to the global growth and activity related to the Panama Canal as the normalization of trade during the post-pandemic recovery underpinned 15.3% of the nation’s growth recorded in 2021.
- The canal usage typically filters through to the wider economy in the form of service sector expansion and infrastructure improvements. Therefore, the lower volume of passages is expected to lead to a downtick in revenue and weigh on the growth outlook for Panama.
(Source: Newsroom Panama)