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Wednesday, April 23 2014 @ 04:43 PM EDT

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Panama's Economic Growth Will Lead Latin America Again in 2014 - IMF

Money MattersPanama is the only country in the Americas whose economy will grow by more than 6%, according to the 'World Economic Outlook' report presented yesterday by the International Monetary Fund (IMF). (more)

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Panama, Mexico sign free trade pact

Money MattersPANAMA CITY, Panama (AP) — The presidents of Panama and Mexico have signed a free trade agreement that should smooth the way for Mexican businesses to operate in the Central American country.

Panama's Ricardo Martinelli and Mexico's Enrique Pena Nieto signed the accord during a regional meeting of the World Economic Forum in Panama on Thursday.

Panama exported just $17.3 million in goods to Mexico last year, while Mexico sent about $1 billion to Panama and has about $2 billion worth of investments there.

Panama Commerce Minister Ricardo Quijano says the deal allows Panama to retain tariff protection on key agricultural products such as corn, potatoes and milk products.

The treaty still awaits ratification by legislatures in both countries.

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Expocomer Opens Today

Money MattersExpocomer opens today, known as the most important commercial showcase for Latin America - in it's thirty-second version (XXXII ) - featuring the distinguished legal and business personality from Colombia Noemí Sanín Posada, and president Ricardo Martinelli at the inauguration. (more)

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Colon Free Trade Zone Exports to Venezuela Collapse

Money MattersThe diplomatic and trade crisis between Panama and Venezuela has affected the companies in the Colon Free Zone most directly. (more)

Editor's Comment: (Today's comments, worth the price of admission all by themselves...)

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Martinelli Will Announce Free Trade Agreement with Mexico

Money MattersThe Minister of Commerce and Industry of Panama Ricardo Quijano expressed confidence yesterday that President Ricardo Martinelli would announce the completion of negotiations on a Free Trade Agreement with Mexico during his visit to the country tomorrow for talks with his counterpart, Mexican President Enrique Peña Nieto.

"Everything seems to have ended well ... what we have to see now is the finalization of the text, but everything indicates that we're done" with the negotiation of the agreement, Quijano told RPC Radio.

"Already between today (Saturday) and tomorrow (Sunday) we should have the text ready" for the treaty, so Martinelli will be able to announce that the Free Trade Agreement with Mexico has been completed, Quijano said.

Delegations from Mexico and Panama on Saturday conducted the fifth round of Free Trade Agreement negotiations. Martinelli will travel to Mexico tomorrow, on Monday, where he will meet with President Peña Nieto.

The idea is that the FTA will be signed when Peña Nieto comes to Panama for the World Economic Forum, whose Latin American edition will be held in Panama from 1 to 3 April, Quijano said.

In 1996 the two countries began talks on a trade agreement, but those tales were suspended in 2003 due to differences over the tax issue. However, the entry into force on 31 December 2011 of a treaty to avoid double taxation paved the way for the resumption of negotiations in 2013.

"I believe Panama got what we were looking for," said Quijano, and he said Mexico was very mature and responsible during the negotiations.

Trade between Panama and Mexico in 2012 totaled $561 million.

In addition it is estimated that the investment made by Mexican companies in Panama exceeds $2 billion, making Panama the tenth largest recipient of Mexican investment in Latin America and the Caribbean.

With this Free Trade Agreement, Panama may become part of the Alliance of the Pacific, because one of the requirements for membership is to have an agreement with its founding members (Chile, Colombia, Mexico, and Peru) and Mexico was the only one with which Panama has not yet signed. (Prensa)

Editor's Comment: These agreements serve to smooth the way for increased trade between countries, by removing barriers and restrictions, and generally making things easier. Ricardo Martinelli, who is first a businessman and then a politician, understands the value of these sorts of agreements, and during most of his administration they have quietly and persistently pursued greater and improved trade relations with all partners - Mexico included.

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Panama economic growth slows to 8.4 pct in 2013

Money MattersBy Lomi Kriel (Reuters) - Panama's economy slowed in 2013 after two straight years of double-digit growth, but remained one of Latin America's fastest expanding economies thanks to heavy government infrastructure spending, official data showed on Thursday.

Panama's economic activity rose 8.4 percent last year compared to a downwardly revised 10.2 percent in 2012, the government statistics agency said, figures in line with what the finance ministry had projected for the year.

The easing in growth comes as investments in large-scale infrastructure projects, including the $5.25 billion expansion of the Panama Canal, draw to a close.

The Central American country escaped the worst of the global recession, expanding at an average rate of 8 percent over the past six years and notching double-digit growth in 2011 and 2012.

Much of Panama's growth is credited to the public infrastructure spending, including the construction of the trademark canal's third lane and Central America's first metro.

President Ricardo Martinelli, whose term ends in May, has also poured money into new roads and hospitals and cleaning of Panama Bay, boosting the construction industry's growth by 30 percent in 2013.

The spending has created a budget deficit of 2.7 percent of GDP, Finance Minister Frank De Lima said, which some analysts find worrying given the strong growth the country has had.

Growth has also been lifted by construction and development of a $6.2 billion copper mine on Panama's Atlantic coast, which helped expand the mining industry by nearly a third last year.

The mine is expected to become one of the world's biggest open-pit copper developments and Panama's biggest source of exports, and its first shipments are due in 2016, according to Minera Panama, a subsidiary of Canada's First Quantum Minerals Ltd.

Still, Panama's overall growth was cooled by the worldwide economic slowdown, which dulled trade through the canal and ports.

A delay in the waterway's expansion, which is now projected to finish by December 2015, also persuaded some shippers such as Danish oil and shipping group A.P. Moller-Maersk to use alternative routes from Asia like the Suez Canal, which fits bigger ships carrying more goods cheaply.

Panama's $33.6 billion economy has also been affected by a dispute with two of its biggest trading partners, Colombia and Venezuela, which disrupted Panama's Colon Free Trade Zone, the world's largest duty-free area after Hong Kong.

Venezuelan traders owe the free trade zone about $1.2 billion because of difficulties exchanging the Venezuelan bolivar for dollars. Meanwhile, Colombia has imposed additional surcharges on importing items such as clothes and shoes.

Panama's Finance Ministry has switched to using 2007 base rates instead of 1996, modifying economic back data.

Editor's Comment: Focus on one thing - "...remained one of Latin America's fastest expanding economies..." The amazing expansion of the Panamanian economy remains firmly on track. Only Panama can complain that 8.4% growth is a bit off, after two years of double digit growth. The rest of the economies of Latin America would give their left coffee bean to be growing at 8.4%...

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Cargo Movement Through Panamanian Ports Increased 2.2% in 2013

Money MattersA total of 78.2 million metric tons of cargo moved through Panamanian ports in 2013, representing an increase of 2.2% compared to 2012, according to an official source.

The increase in freight movement in 2013 over the previous year was about 1.7 million metric tons, explained the Secretary of Economic Affairs and competitiveness of the Presidency, Kristelle Getzler, during the presentation of the main economic indicators of the country.

Getzler said the positive trend seen at the end of 2013 has continued into 2014, because in January there was a 22% increase in transfer loads as compared to the same period last year.

A total of 5.7 million metric tons were moved in January 2013, while in January 2014 the total increased to 7.0 million, the official explained.

There were also increases during January 2014 in the movement of containers, up 2.7%, and in the movement of vehicles, up 58.8%. (Critica) (snip)

The number of visitors to Panama also increased by 5.6% according to statistics provided by the Panamanian Tourism Authority (ATP).

A total of 2.2 million tourists arrived in Panama during 2013, compared to 2.08 million in 2012.

Foreign Direct Investment also showed a significant increase, up 61.1% (4.651 billion) in 2013, up from 2.887 billion in 2012.

Finally, levels of poverty (25.8 %) and extreme poverty (10.6%) in 2013 decreased by 0.7 and 0.5 percentage points respectively over the previous year.

Getzler said statistics from the Ministry of Economy and Finance ( MEF) state that approximately 10,000 people moved out of poverty in 2013, while unemployment, according to the latest data last August remained at 4.1 %, the same as in 2012. (Critica)

Editor's Comment: I cut out some relatively boring details on the exact numbers of movement of this or that through the ports - and who cares? What matters is the overall headline, that the ports in Panama are seeing more traffic, which is a good thing on several fronts. This report paints an picture of the Panamanian economy that is in excellent health. Increases in port traffic. Increases in FDI. Increases in the numbers of tourists arriving to the country. Lower levels of poverty and extreme poverty. Low unemployment. I honestly can't remember publishing a "bad news" economic story for Panama - and I've been doing this for ten years.

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Canal Conflict Will Be Resolved Before The End Of February

Money MattersPanama's Minister of Economy and Finance, Frank De Lima, said the conflict between the Panama Canal Authority and the GUPC consortium responsible for the canal expansion will be solved, and the newly expanded Panama Canal will be opened during 2015.

He said there will be a final solution before the end of February, because uncertainty is not good for the Canal, the country, or the world.

"This situation affects the rest of the countries preparing to expand their ports and receive Post Panamax vessels," he said.

He said ships going through the Suez Canal take more time to reach their destination, so it is in everyone's best interest for the newly expanded Panama Canal to be completed as soon as possible.

Canal Revenue Projections

According to Minister De Lima, they still have not prepared the 2015 budget, nor do they have estimates regarding the contribution (amount of revenue) that will be generated by the Panama Canal.

"What is it intended, is that the contribution received by the government from the Panama Canal is not affected," he said.

He said currently the Panama Canal provides $950 million annually to the state.

"What is happening at this time, is there will be no negative economic impact en the country in these years. When we write the 2014 annual budget we will meet with the ACP, to learn how much to expect in 2015," he said.

The contractual conflict that threatens to cripple work on the Panama Canal expansion project is now going into a third week during which it is hoped there will be some final decisions regarding the future of the project, caused by a lack of liquidity for the GUPC consortium. (Panama America)

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Panama economic growth cools to three-month low in November

Money MattersPANAMA CITY, Jan 24 (Reuters) - Panamanian economic activity eased in November to its slowest pace since August, the national statistics agency said late on Friday.

Economic activity rose 7.95 percent in November compared with the same month last year, below the 8.26 percent rate notched in October.

The finance ministry projects Panama's $33 billion economy expanded 8.5 percent last year.

Though the economy is stepping back from the double-digit growth Panama has posted in four of the past six years, it is still one of the fastest-growing in the region.

The growth is spurred by massive infrastructure spending, including the ongoing expansion of the Panama canal, which began in 2007, and the $1.8 billion construction of Central America's first metro rail system.

But since the start of 2014, the Panama Canal Authority has been embroiled in a public row with the consortium known as Grupo Unidos Por el Canal over $1.6 billion in added costs the GUPC says have arisen during work on the project.

Editor's Comment: Panama's economy is still growing nicely and will expand by another 8% or more for the year (2013). Amazingly enough, this has been going on for more than a decade now. It's all good news on the economic front in Panama. What's going to end it? A manpower shortage. There are already more jobs available than there are people to do them, and a shortage of people with the skills necessary to do the jobs. Step one is to get a body with a pulse who can fog a mirror that's place in front of their face. Step two is to train that body to do a task. It's one thing if you have the warm bodies, and can train them. It's quite another when you run out of warm bodies.

After ten straight years of economic growth, Panama now has a practical level of 0% unemployment - or full employment (where the jobs are located). Of course you can still find people who are unemployed, swinging in a hammock up in the mountains 40 miles from the closest road. But those guys apparently want to be unemployed, or else they would come down out of the mountains to get a job. The Panamanian economy is now about to reach that level where growth might start to slow due to a lack of warm bodies. It happens. Expect the Panamanian government to continue the trend of loosening rules and regulations on foreigners to allow more to come in, live, and work legally. The beat must go on...

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Panama economy grew 8.9 % in the third quarter of 2013

Money MattersPanama's economy grew 8.9 % of gross domestic product (GDP) in the third quarter of 2013, compared with the same period last year, driven by domestic consumption, the government reported today.

Panama's GDP stood at 7089.6 million for the third quarter of last year, 582.1 million over the same period of record in 2012.

This was stated at a press conference by the Project Coordinator of the Secretary for Economic Affairs and Competitiveness of the Ministry of the Presidency of Panama, Gina Gomez.

She said the accumulated growth between January and September 2013 reached 8 % of GDP, higher than the 7.5% calculated by both the International Monetary Fund (IMF) and the Economic Commission for Latin America and the Caribbean (ECLAC), which the official assessed as "very positive."

The GDP growth in the third quarter of 2013 was based on the "success" of sectors such as retail, construction, mining, manufacturing, land passenger transport, telecommunications, banking and real estate, health, private education, and services, according to official information.

Also the export of fruits such as banana, watermelon and cantaloupe, and by fishing, hotels , air transport and port activities.

According to statistics from the Comptroller General's Office, cited by Gomez, activities that registered declines were commerce from the Colon Free Zone, the second largest in the world after Hong Kong, and Panama Canal operations.

There were also declines in agricultural activities such as rice, corn, sorghum, beans, vegetables, coffee, raising cattle, and hogs.

Gomez said the Monthly Index of Economic Activity (MIEA) for October rose by 8.26% compared to the same period in 2012, which showed "positive rates all categories measures of economic activity."

The 8.26% expansion for October left a cumulative rate of 7.79% for the first ten months of the year.

The IMAE not reflect one hundred percent of the economic activity in the country, but its components are used as a reliable basis for making investment decisions, according to official information.

Foreign direct investment (FDI ) in January-September totaled 2.962 billion dollars spent, or $74.6 million more than over the same period in 2012.

Panama's economy grew by 10.6% of GDP in 2012 and the Government has estimated that it will expand by 8.5 % in 2013. (Panama America)

Editor's Comment: I literally can't remember the last time I wrote or covered a "bad news" economic story for Panama. The economy has been growing by an average rate of about 10% per year or more since at least 2004. The GDP per capita (PPP) continues to improve and expand, meaning the average Panamanian has more money to spend than ever before. There are still a couple of counties that are "richer" than Panama (depending on whose data you choose to believe) such as Chile and Argentina - but in the next decade or so the Panamanian economy will continue to grow. Before too long Panamanians will be the "richest" citizens of Latin America - it's inevitable.

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