The International Monetary Fund IMF, one of the world’s most prestigious economic institutions, predicts Panama’s economy is ready to explode in 2021.
According to the IMF’s latest projections, Panama’s GDP is expected to jump by a whopping 12 percent in 2021, far outpacing many of the world’s biggest economies. That would be the largest single-year growth in a decade, and while it certainly reflects a big uptick from the pandemic, the forecast also illustrates the strength of the foundation of trade and mining that supports Panama’s economy.
The double-digit growth of 2021 isn’t expected to last, but Panama’s growth will remain robust, with a 5 percent increase expected in 2022 and 2026.
Panama’s growth in 2021 is expected to lead Latin America and the Caribbean (except for Guyana), by far. In contrast, of the big players in the region, Chile is expected to post an increase of 6.2 percent in 2021, with Argentina at 5.8 percent and Brazil at 3.7 percent, according to the IMF’s data.
The projected 12 percent increase is a strong vote of confidence that Panama will quickly bounce back from the pandemic, thanks to its established infrastructure and key economic drivers. The Panama Canal, Real Estate Market, Cobre mining operations, and government spending on bridges and the metro expansion will keep the economy ticking in the years ahead.
The global economy is expected to grow by 6 percent in 2020, with a slight slowdown to 4.4 percent, according to the IMF, which generally raised its estimates for the year ahead. “The projections for 2021 and 2022 are 0.8 percentage point and 0.2 percentage point stronger than in the October 2020 WEO, reflecting additional fiscal support in a few large economies and the anticipated vaccine-powered recovery in the second half of the year,” IMF reports.
While “high uncertainty” surrounds the global economic situation, some countries will rebound faster than others. Panama, with its strong foundation of economic drivers
Global growth is also a key indicator of strength for Panama, with so much of the world’s trade passing through the Canal and the country’s logistics facilities.