economy

Businesses show cautious optimism

la prensa

expensive: Inflation has impacted consumers and business owners. 1102309

The results of the latest business barometer, which is compiled by the consulting firm Deloitte, has revealed that inflation is perceived by Panamanian business owners as the issue they are most concerned about.

In the survey, 73 percent of executives identified inflation as one of the main risks facing the country’s economic stability and their own companies.

According to the survey, other threats were identified as the falling value of the U.S. dollar and rising spending by the government.

The survey was conducted between Aug. 21 and Sept. 8, before the world's financial markets went into a tailspin. If the survey were conducted more recently, the answers probably would have been much different.

According to the latest report from the Comptroller's Office, the consumer price index showed that inflation stood at 9.8 percent in August. Some local economists have predicted that it could reach double digits this year.

That level of price hike to the cost of living has not been registered in Panama since 1981, according to government records.

The business sector seems to have already taken steps to address this problem.

Most of the 80 companies surveyed by Deloitte have implemented wage increases, subsidies for fuel and distributed food vouchers in an effort to offset cost of living increases impacting their employees.

According to the survey, salary adjustments have been the most frequent action taken by companies. A total of 79 percent of the respondents said that they raised salaries in the past year.

The measures taken by the government to tackle inflation, which have included boosting the salaries of public employees and upping benefits for retirees, have not been well received by the private sector.

Of those surveyed, 61 percent felt that the performance of the government in fighting inflation has been “bad.”

The majority of business owners have a positive outlook for the next year, saying that they plan to increase production and investment.

“There is a cautious optimism in the business sector,” concluded the Deloitte analysts.