Corozal did not materialize… Economy continues its trend
In 2016, Panama’s GDP grew 4.9%, deaccelerating for a fifth consecutive year. The leading sectors in the economy were: education services (which grew 10.9%); electricity, gas and water supply (10.6%); mining (8.4%); construction (8.3%); and financial intermediation (6.6%). On the other hand, agriculture and livestock, fishing and manufacturing industries declined by 0.1%, 8.4% and 2.8% respectively.
Construction remained the main driver of GDP growth for the fall 2016, representing 1.3 percent points (p.p.) of the total 4.9% growth in the last four quarters, followed by other services activities (1.2 p.p.). The Monthly Index of Economic Activity (IMAE) shows an increase of 5.0% in January with respect to the same month on the previous year. During the same month, the Panama Canal toll revenues, container movement in ports and net tons transported by the Canal grew 17.0%, 17.5% and 26.6% respectively, mainly due to its expansion. Construction permits decreased 25.4% during January. However, slaughter of beef cattle, liquor production and new cars declined 13.1%, 26.5% and 10.7% respectively. Inflation rose 1.9% on February, yielding an average inflation of 1.75% for Jan-Feb 2017.
The Panama Canal Authority declared the bidding for the construction of the Corozal port to be deserted on March 3, 2017, after it failed to obtain proposals from previously interested companies before the twice extended deadline. Factors that influenced this outcome include, but are not limited to, the decline in global trade to GDP ratio, broader water-transit capacity that leads to fewer land-bridge moves at the terminals, and the negative effects of mega vessels and mega alliances. The postponement of the project will affect our projections for the coming years because of the direct impact on the construction sector of three years, and the expansion of the logistic cluster thereafter.
Odebrecht is currently under investigation for the US$ 56 million paid to senior government officials between 2010 and 2014 as bribes to obtain contracts; and also for the accusations made to the two sons of the former president Ricardo Martinelli for receiving bribe money from Odebrecht worth US$ 22 million in exchange for governmental contracts. Next June the information contained in the accusations made by the 78 officials of Odebrecht and Braskem will be revealed. These documents will provide with evidence about the payments made to state officials in Brazil and 11 other countries in Latin America, including Panama.
Now read on...
Register to sample a report