Panama’s economy is expected to grow by more than 5 percent in the next year, but there are still several untapped sectors that could spur even more economic expansion, a top government official said at a recent economic forum.
Speaking at “Economic Outlook 2020,” organized by El Capital Financiero, Manuel Ferreira, director of economic affairs for the Panama Chamber of Commerce, said that tourism and construction have the potential to expand and add significant growth to the economy. Both the private sector and the government have been investing to promote Panama travel and develop better infrastructure in recent years.
Industries like tourism have a “multiplier effect” that generate more economic activity and direct impact on growth, Ferreira said.
“There are many things that can be done to really reactivate the economy,” Ferreira said, according to coverage in El Capital Financiero. “The issue is that you have to be clear about some of these things to take the right path.”
Large portions of the country’s economic growth have been driven by the logistics industry and large-scale infrastructure projects, such as the expansion of the Panama Canal and the new metro system, he said. But logistics and government-backed projects only impact the economy in limited ways, while more private investment can have wide-range implications for the country’s economic future.
“The private sector is the one that has to be activated to generate employment and also has to move to bring private investment,” he said.
In many ways, the comments underscore the basic of the Panama economy. The growth rate is impressive but only hits the long-range potential of the economy.