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Economic growth remains steady

Figures show that the economy is still expanding, though the growth is less than that of 2007.

David Mesa/La Prensa

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Panama's economy, as measured by the Índice Mensual de Actividad Económica (IMAE), grew 8.2 percent in the first half of 2008. That represents a drop of more than 2 percent as compared to the same period in 2007, but this rate of growth is “very strong” and one of the highest in the region, several economists said.

Overall, the country's economic activity increased by 10.58 percent last year. “The slowdown we have had is not a cause for alarm. On the contrary, if we continued to grow at that pace, we could have faced an overheating of the economy and that would translate into more inflation,” said economist Adolfo Quintero. According to the Colegio de Economistas, Panama's inflation rate for 2008 will be 8.7 percent. According to the IMAE report, the economy grew 6.9 percent in June as compared to the previous year. That growth rate was much slower than the previous year, when the figure for June was 11.3 percent.

“In this case, any growth is good news,” Qintero said. “The economy continues to endure the global economic crisis.”

Panama's economic expansion contrasts with the slowdown being experienced in many countries, most notably the United States.

Quintero noted that the IMAE measures only 75 percent of the total economy.

“I am sure that the change will be even more positive when they publish the figures for the gross domestic product (GDP), which is a much more comprehensive indicator,” he said.

The Colegio de Economistas estimated that the country's GDP will grow 9.6 percent in the first half of the year and 9 percent overall.

Other projects call for the country's GDP to increase between 7 and 9 percent.

“Our estimates indicate that Panama will continue to grow between 5 and 8 percent per year over the next 10 years,” said Nicolás Ardito Barletta, president of the Centro Nacional de Competitividad.

While Panama's economy continues to grow, inflation remains a concern. After years of relatively little inflation, it is expected to near double digits this year.