Panama on the GAFI gray list and awaiting the October exam. First-quarter GDP growth and IMAE numbers confirm 6.4% projections for the year. Inflation spikes in May. Cortizo to announce the status of his health condition next month.
The government faces a credibility crisis if, during the GAFI committee meetings in October, Panama remains on the "gray list" or suffers a downgrade by GAFI. Minister Alexander's statements and official reports are optimistic about the outcome of the next review, but the Bank Superintendent is more cautious than the Minister. The government argues that recent efforts by the Administration to comply with GAFI conditions are moves in the right direction, including 89 inquiries about money laundering and numerous monetary sanctions on banks. But the registry of the "ultimate beneficiaries" of Panamanian corporations - the critical condition of the proposed reforms - is far from complete and seems challenging to fulfill in the medium term due to local interest group pressure.
GDP grew 13.6% in Q1 2022 compared to Q1 2021 and 4.6% in Q1 2019. Overall economic activity exceeded its pre-pandemic level for the first time (including mining) but remained below the pre-pandemic level (-1.1%) sans copper mining. IMAE growth in April shows a deceleration of activity: 6.2%, in line with the consensus of 6.0%-6.5% for 2022. Inflation accelerated in May after four months of relatively low increases in prices.
On July 1, Laurentino Cortizo will address the Legislative Assembly on the inauguration of the third session, running until mid-2023. Cortizo mentioned two weeks ago that after his speech, he would soon decide the schedule of his health appointments in Texas. We will keep our readers posted on those issues.
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