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Two years into President Ricardo Martinelli’s term there are signs that consumer confidence is beginning to wilt. An opinion poll by Unimer for La Prensa, a Panama City newspaper, published on 11 July, found that 43% of the 1,204 people surveyed thought that the economy was in a worse state in June 2011 than 12 months earlier.
Admittedly, the level of economic confidence is still historically high at 56%, but it has been falling consistently in the past six months. In June 2010 60% of those polled by Unimer thought that their economic situation had improved or at least not deteriorated in the past year. This year only 56.2% said the same.
Furthermore, only 20.9% said that they were sure that that their economic position would improve in the next 12 months. This was the lowest reading on this indicator since August 2009 when it stood at 50%.
On the glass half-empty side, 36.7% said that things were either the same or worse than a year ago. What is interesting is that it is the young and richer Panamanians who think this: Unimer said that the bulk of those who thought that they were doing no better than a year ago earned between US$1,500 and US$2,999 a month and were also aged between 25 and 34.
Raúl Moreira, president of the Colegio de Economistas de Panamá, argued that rising food prices were probably the main reason for the deterioration in economic confidence. He said that inflation also seemed to be on the rise and that the quality of new jobs being created was deteriorating. He noted that the percentage of workers who believed that they were overqualified for the job they were currently doing rose from 11% to 14% in 2010.
Canal: The administrator of the Panama Canal, Alberto Alemán Zubieta, forecasts that this year the Canal will beat its record for tonnage shipped through the Canal and tolls paid. He said that, the Canal Authority reckons that the tonnage for the current financial year which ends on 30 September 2011, will be between 15m t and 20m t ahead of the 320m t it had initially budgeted.
The Canal’s previous record year was in 2007, before the global financial crisis, when it handled 312m t.
Alemán said that he expected cargo levels to hold up in the final quarter of the financial year. This is bold, given that there is strong evidence that the US economy is not growing as well as it was six months ago.
Alemán expects the Canal’s total income to come in above US$2bn, which is just ahead of the result for the last financial year.
Banking centre: At the end of May the 92 banks operating in the International Banking Centre in Panama had assets of US$74bn, up 15% in a year. Domestic deposits were up by 9% at US$31bn while domestic credit was up by 15% at US$26bn. The figures for the state of the national banks as reported to the Instituto Nacional de Estadística y Censo showed that foreign banks and locals increased their deposits in Panamanian banks. This extra money was invested in loans and securities.
Car sales: The gloomy Unimer survey of economic confidence does not chime with data for vehicle sales. These show vehicle sales up by 31%, year-on-year in the first four months of 2011 compared with the same period of 2010. In the first four months of 2011 vehicle sales came to 14,175 compared with 10, 851 in the first four months of 2010. Sales of luxury vehicles were up by 63%, year-on-year at 284 for the first four months of 2011.
Panama has been removed from the Organization for Economic Co-operation and Development’s (OECD) grey list after signing a tax information exchange agreement (TIEA) with France. The deal brings Panama’s total of agreements to the critical twelve that meets the international standard.
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