In the News from Panama

JP Morgan Upgrades Panama Economy Forecast

International investment giant JP Morgan has upgraded its outlook for Panama’s economy, citing several positive indicators for its growth.

Noting “positive news” in several areas, the bank raised its growth forecast for Panama’s economy to 3.5% in 2024, after originally predicting a slight 0.5% increase. That’s a significant jump, and reflects a new evaluation of Panama’s economy, after several recent challenges.

The closing of the Cobre Panama mine and a slowdown in Panama Canal traffic due to drought conditions have been dragging down the overall economic outlook. Panama’s economy grew 1.7% in the first three months of 2023, compared to a jaw-dropping, but unsustainable 9.3% for the first three quarters of 2023.

However, several factors have prompted JP Morgan to change its forecast. For one, the drought is easing and Panama Canal traffic is returning to normal. With rising water levels, the Panama Canal Authority (ACP) recently announced plans to eliminate daily traffic restrictions, increasing passages from 22 to 32 per day.

The bank’s analysis also found that Panama’s economy continues to hum along, despite last year’s headwinds. Economic activity in the first four months of the year has been better than expected, even though the country was dealing with the general elections, the bank noted in its report.

“The data suggests that the business sector was greatly affected by uncertainty, but consumption appears to have held up much better,” the report said.

The 3.5% projected growth may not be as gaudy as the double-digit expansion of past years, but Panama continues to grow faster than most of the established economic powers in the region. More than anything, the new report shows that Panama remains a model of stability, even while turmoil continues to grip many parts of the world.