Economic Activity To Hold Up Well in Panama, But Data Availability Still A Challenge

• Fitch Solutions has revised its 2023 forecast for Panamanian real GDP growth from 5.0% to 6.0%, which follows a 10.8% print in 2022. Fitch noted that it sees growth easing further to 3.0% in 2024.
• Growth will be underpinned by the government’s move to ramp up spending ahead of next year’s elections, helping to offset the drag from the drought that has impacted the Panama Canal and higher interest rates.
• Of note, Panama’s monthly activity indicator suggests that the economy has held up better than expected over H123, with growth seemingly having averaged around 9.0% y-o-y. However, Fitch expressed that no official GDP data for 2023 was available as of October 16.
• That being said, the monthly figures which are available are broadly consistent with comments from Minister of the Economy and Finance Héctor Alexander, who suggested in late September that the economy had grown by around 8.0% in the first half of the year.
• However, risks to Fitch’s forecasts are large and are related to data availability issues which make it very difficult to forecast with any real degree of accuracy.

(Source: Fitch Solutions)