There is no doubt that the COVID-19 pandemic has effected each and every country in the world adversely, and that includes Panama. With nearly a full year of strong health-based measures that limited access to jobs, finances, and mobility, the global economy has hit a major snag. As the hub of the Americas, and a leading country in Latin American business and travel, Panama has been hit especially hard with the ancillary economic effects of COVID, along with the human toll the virus has taken on the population.
All that being said, it appears as though there is some light at the end of the tunnel in regards to getting back to normal again. With vaccines ordered and on the way to Panama, we expect 2021 to be a year that trends upward again, albeit slowly. As the vaccinations become more available to Panama’s citizens, the economy will open up along with it, as well as the easing of restrictions on movement, gatherings, and domestic travel. Panama is in a position that is far more favorable than most countries in the region, and despite very strict regulations throughout 2020, the rebound time to get back to normal should be more efficient than many of its neighbors.
The health outlook
First and foremost, before anything returns to “normal”, the health and safety of Panama’s people need to be taken care of. The Ministry of Health (MINSA) is well aware of this and has been working with all branches of Panama’s government throughout the Pandemic to find the best ways to do this. With vaccines on the way, Panama’s at-risk population will be the first to be taken care of, as well as its essential workers, and eventually the large portion of the population that is not high-risk but still needs a viable way to go about their lives healthily. By the end of 2021, Panama expects that most of the country that needs the vaccine will have had it, and the rebound of the economy should follow the same trajectory.
The economic outlook
As the population gets vaccinated, and cases start dropping in volume, people will get back to work and businesses will begin to operate at full speed again. This will take some time, as Panama’s government plans to stage reopening and ease restrictions as a process, not all at once. You can expect that the early stages of this in 2021 will be a bit rough, and perhaps slower than many would like. Patience is key here, however, as the economic recovery is a long game, not a short one. Due to the damage of most of the economy being frozen in 2020, you will see a lot of small and mid-sized businesses taking loans, restructuring, or in some cases, folding. While that is not ideal, it will also open the door for new investment, and for the injection of new capital into older businesses, and new ways of doing things overall.
To be even more optimistic, the economic recovery will open up a new “buyer’s market”, so to speak, for both foreign and domestic investors. Investors who are willing to be patient through the rebuilding process will have great opportunities to buy into Panama’s economy at great prices, and in sectors that are poised to have future, long-term growth. These sectors are particularly the real estate and tourism industries, which have be stuttered by COVID, but are primed to rebound over the next year or two, and continue to trend up after that.