Panama’s economy over the past six years, on average, has grown by nearly double digits. However in 2014, the economy slowed down a little bit, causing some to be cautious. Now, as we head full steam into 2016, it appears the slowdown was merely a hiccup, and Panama’s economy is showing strong, positive growth for the near future. Investments in Panama largely rely on future predictions, and long-term strategies; which is why steady positive growth, even if it’s not at the boom levels of 2010-2012, is very important to the overall economy in the country.
How much did Panama’s economy grow to end 2015?
According to the “Instituto Nacional de Estadistica y Censo (INEC) de la Controlaria General de la Republica,” during the third trimester of 2015, Panama’s economy generated $8.95 billion, which is nearly $475 million more than over the same period in 2014. This number represents a 5.6% growth, which is great news for the economy. And despite it being under the historically high numbers from about 5 years ago, it is still a significant leap; and one that won’t be lost on investors, both foreign and domestic. It’s also a great sign for 2016, as many of the positive economic contributors are expected to continue to grow.
Where Panama’s economy is growing
Panama’s economy continues to rely heavily on services, with logistics, shipping, tourism, and commercial/residential construction leading the way. But Panama is growing to diversify their economy, which could help expand overall growth through new industries and revenue generators. Industrial mining, commercial transportation, private health services, and eco-tourism are all industries that also look to expand going into 2016, and diversify growth of the long-term investments into the economy.
Panama’s economic growth is fueled by a partnership between public and private industry
Another aspect to look at is that not all of this investment in growth is private. Much of Panama’s economic growth is fueled by major publicly funded projects to help modernize and improve Panama. These include the Panama Canal, the Panama Metro, the Panamerican Highway renovations, and the 4th Canal Bridge. These types of projects – even the ones that haven’t started yet – are a big reason why private industry feels confident in investing in Panama. Plus, with government’s cooperation with private industry and a favorable investment climate, it helps encourage rapid growth; something Panama expects, and is banking on for 2016.
Staying optimistic without getting ahead of ourselves
With the numbers looking up as we enter into 2016, it’s easy to become optimistic, and that’s great. We should, however, also be very diligent about investing wisely, and into areas with steady growth. After all, steady, long-term growth is much more reliable that small economic booms. Panama looks like 2016 will bring a lot of positive change, but let’s not forget that hiccups do happen, and even single digit growth is a positive outlook for the future. Let’s hope that in 2016, investment continues to grow, and Panama continues to build on its great business relationships; both in the rest of the region, and here at home.