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Latin America Investment News on Viva Tropical

Is Panama Still Leading the Economy Race?

Article Summary:

Panama has recorded, for the second year, a double-digit growth of 10.7 percent in 2012, compared to 10.8 percent in 2011. The tiny Central American country’s economy has largely evaded the global recession, expanding at double-digit rates for four of the past six years. But can it continue at this pace for much longer.

Photo Credit: Foro de Costa Rica

Original Article Text From Reuters:

Panama records 2nd year of double-digit growth in 2012

Panama’s economy notched its second consecutive year of double-digit growth in 2012, driven by a $5.25 billion expansion of its canal and the development of Central America’s first subway.

Panamanian growth reached 10.7 percent in 2012, the government statistics agency reported Friday, compared to 10.8 percent in 2011. Growth in the fourth quarter was 10 percent from the same period a year earlier.

The tiny Central American country’s economy has largely evaded the global recession, expanding at double-digit rates for four of the past six years.

Much of the growth is credited to significant public infrastructure spending, including the ongoing construction, begun in 2007, of a third lane in Panama’s trademark canal. It is expected to increase Panama’s gross domestic product by about a third over the next decade.

Logistical and transportation services linked to the canal have grown in importance over the past six years and the government is expected to begin the construction of a third port on the Pacific this year.

Strong government spending translated into a deficit of 2.1 percent, which some analysts find worrying given rapid growth.

High spending and Panama’s dollarized economy also fanned inflationary pressures, with consumer price index gains hovering around 6 percent for much of 2012, even though recent months saw a decline.

Link to Original Article:

From Reuters

Latin America Investment News on Viva Tropical