Caribbean & Central America - March 2017 (ISSN 1741-4458)

Growth: On 20 February Panama’s economy & finance ministry (MEF) issued a report in which it forecast that the economy would grow by 5.8% this year, up from 5.2% for 2016. The MEF press release, which attributes this projected growth to dynamism in the sectors of construction, mining & quarrying; financial services; and electricity, gas & water supply, points out that this forecast is in line with the International Monetary Fund (IMF). The same press release cites the World Bank (WB) as forecasting growth of 5.4% for 2017 and the United Nations (UN) Economic Commission for Latin America and the Caribbean (ECLAC) as projecting 5.9% GDP growth.

The MEF press release says that its estimate is also based on Panama Canal activity, following the inauguration of the expansion project in June 2016 [WR-16-25], along with substantial investment in both the public and private sectors.

As regards investment projects in the private sector, the MEF highlights the construction of the country’s first liquid natural gas power plant in Colón province with a US$1.15bn investment. A subsidiary of US company AES, AES Panamá began work on the plant in May 2016. The MEF also highlights as other private sector investment projects, a US$5.9bn investment by Minera Panamá, a subsidiary of Canada’s First Quantum Minerals (FQM), in Cobre Panamá, a large open-pit copper development project in the district of Donoso, Colón province.

In terms of public investment projects, these include the Atlantic Bridge (US$570m) over the north entrance to the Panama Canal and the Ciudad Esperanza construction project (US$137m), located near the village of Vista Alegre in the Arraiján district, which, once finished, will provide over 2,200 new houses alongside schools, sport facilities, and a new road. It also notes the construction of Metro Line 2 (US$1.86bn) to the east of the capital which is expected to be operational by December 2018 and will connect Panama City at the San Miguelito station with Tocumen international airport.