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LatinNews Regional Monitor: Caribbean & Central America - 19 January 2017

ECONOMIC OVERVIEW: PANAMA

Growth: On 20 December Panama’s economy & finance ministry (MEF) issued a press release citing an MEF adviser Horacio Estribí as forecasting 5.2% GDP growth for 2016. Estribí noted that foreign direct investment (FDI) inflows to the country were up 17.8% in the first nine months of 2016 on the same period in 2015 (albeit without providing absolute figures). He also claimed that incidents such as the US government’s May 2016 blacklisting of one of Panama’s most important business groupings, the Waked group, and the ‘Panama Papers’ – the biggest leak of secret information in history which made headlines in April 2016 [RC-16-05] – had not had an impact on the economy in the short term. He cited as evidence an increase in bank deposits, which he said exceeded US$84bn as of September 2016, US$1.01bn more in comparison with the total at the end of the year 2015. Estribí also highlighted that the Panama Canal expansion, which was completed last year, and other public investment projects would have a direct and positive impact on the Panamanian economy and improve the country’s competitive advantages. The most recent (December 2016) estimates from the United Nations (UN) Economic Commission for Latin America & the Caribbean (Eclac) forecast 5.2% growth for Panama for 2016, second only to the Dominican Republic (6.4%). The same report forecast 5.9% growth for 2017, again behind only the DR (6.2%).

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