In the News from Panama

Economy Expected to Bounce Back in 2022

Moody’s credit service forecasts a continued resurgence in the Latin American and Caribbean economy in 2022, according to a report released this week. Thanks to the strength of several key indicators, the region’s economies should return to pre-pandemic levels, the agency says.

Several of the top international agencies are predicting steady growth in the region, as many areas of business gradually return to normal. Fitch Solutions forecasts a healthy 5.8% growth in Panama’s economy in 2022, led by the strength of the Panama Canal, mining operations, and the continued expansion of multinational operations.

Panama’s gross domestic product (GDP) grew by 10% in the first half of the year compared to the same period of 2020, as the country started to reopen and more people were vaccinated. And economists expect 2021 to show a healthy increase in Panama’s overall economic activity.

Moody predicts the region will see “more moderate economic growth rates” in 2022, but many countries will return to pre-pandemic levels, which is certainly good news for every country in Latin America.

A decrease in fiscal deficits and a gradual stabilization of debt ratios will aid many countries, especially as they scale back on pandemic-related spending. Most of the countries in the region are well-prepared to handle short-term financial issues, the agency concludes.

The agency’s conclusion reaffirms the general conclusion that economies are going to return to a regular growth pattern, once these pandemic issues are resolved. While the 2021 numbers reflect a solid rebound in Panama and other countries, many aspects of the overall economy are only starting to return. 

In Panama, many parts of the economy are booming, even though tourism has only started to recover. As more countries relax travel restrictions, Panama’s efforts will be aided by a $300 million campaign to boost awareness from the Panama Tourism Council.