National

Gross Domestic Product Rises

End of year results for Panama’s gross domestic product are positive and show an increase over the figures for 2006 and earlier years.

The Contraloría anticipates that growth will exceed 9.5 percent this year on account of gains in exports, financial services, the port system and the Canal. Other sectors of the economy show dynamic growth, too.

CARLOS LEMOS/LA PRENSA

FORECAST: Panama´s growth highest in Latin America.955869

Panamanian authorities predict that growth of the gross domestic product will be greater than 9.5 percent this year, owing to gains in exports, financial services, the port system and Canal revenues.

This figure coincides with the prognosis of the Comisión Económica para América Latina (CEPAL), which says Panama will post the highest growth figures in all of Latin America.

Carlos Vallarino of the Controlaría has stated that in addition to the sectors already mentioned, major infrastructure projects and the free trade treaties with El Salvador, Taiwan and Singapore, among others, have contributed as well to this year’s growth in the gross domestic product.

Growth in 2008 is expected to be even better, as a majority of large projects now in their initial stages will have progressed considerably during the upcoming year. This will be reflected in the overall economy and in the arrival of more foreign investment attracted by Panama’s economic and legal security.

With respect to inflation, which rose to 4.8 percent as of this October, that numbermay be held in check by increased competition and the continued opening of the country to world commerce.

This year’s growth will be much greater than that of 2005 (7.2 percent) and 2006 (8.2 percent), the Cepal report pointed out. The report also noted that for the fourth consecutive year, the gross domestic product per capita in Panama has grown substantially, up from 5.4 percent in 2005 and 6.8 percent in 2006 to 7.7 percent in 2007.

Unemployment has decreased significantly, from 8.7 percent last year to 6.3 percent in 2007, partly as a result of the the country’s economic dynamism.

Cepal hopes that the country will maintain a future rate of economic growth above 8.5 percent, given an expected lower external demand for real estate and services while investments remain highly dynamic and work on the Canal expansion intensifies.