A new report from the World Bank predicts Panama’s economy will grow by 5 percent in 2019, the largest increase in Latin America, despite increased turmoil around the world.
Overall, the World Bank expects global economic growth to “ease to a weaker-than-expected 2.6 percent in 2019,” I part due to increased “financial stress in many parts of the world, according to the latest economic forecasts by the organization. In the report – entitled, “Heightened Tensions, Subdued Investment” – the World Bank predicts growth in Latin America and the Caribbean will be “subdued” in 2019, at 1.7 percent, “reflecting challenging conditions in several of the largest economies.”
Panama’s growth will far surpass Brazil, Chile, Argentina, and the other large Latin American economies, according to the study. (In the region, only the Dominican Republic will see larger growth, at 5.2 percent.)
In some ways, Panama’s economy has slowed down, along with the rest of the region, but that is only based on a comparison to the boom years of a few years ago. A return to growth rates of 8 to 12 percent a year is unlikely and unreasonable. That type of growth is unsustainable and not healthy in the long term.
The new forecast rate of 5 percent represents solid and stable growth, an economy based on a strong foundation, not speculation. The Panama Canal, Cobre Panama mining operation and the continued growth of Panama Pacifico will provide consistent drivers for continued growth, no matter what happens in other parts of the world.
With all these factors in place, Panama’s economy is expected to grow by 5.4 percent in 2020, up from 5 percent in 2019, the World Bank predicts.
The growth is particularly remarkable when placed in the context of the larger global economies. The U.S. economy is forecast to expand by a slight 2.5 percent this year and slow to 1.7 percent in 2020. Europe’s growth is expected to be closer to 1.4 percent, “with softness in trade and domestic demand weighing on activity despite continued support from monetary policy.”