Recently released data shows the Panama economy rebounded in a strong fashion in the first six months of 2021.
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. Economic activity skyrocketed more than 40% in the second quarter compared to the first quarter, according to data from the National Institute of Statistics and Census (INEC).
There is no getting around the jaw-dropping 18% drop in the economy in 2020, as Panama and the rest of the world struggled with the COVID crisis. But the recent data shows that Panama’s economic foundation remains strong, thanks to the Panama Canal, the Cobre Panama mine, Panama real estate, and a wide variety of public infrastructure projects that continue to progress.
To put it in perspective, in the second quarter, economic activity reached $9.12 billion, an increase of $2.63 billion compared to the same quarter of 2020.
“For the second quarter of 2021, mitigation measures and the vaccination process have been allowing health authorities to reduce or eliminate the restrictions established to contain the pandemic,” the government agency reported. The result helped “economic activities begin their recovery process.”
Mining activities and the Panama Canal provided the biggest boost to the economy. Canal tolls increased 20.2% in the first half of the year. Port operations also continued to rebound.
The level of activity is a sharp contrast to other economies in the region, which are continuing to struggle to restart in the wake of COVID. Panama’s rapid pace of vaccination is also expected to help the economy bounce back.
Fitch Solutions forecasts a healthy 5.8% growth in Panama’s economy in 2022, as business continues to return to pre-COVID conditions.