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Economy / Panama

Macroeconomic Forecast Panama

June 2012 | Macroeconomic Forecasts

After Panama grew 10.6% in 2011, the economy continues to expand rapidly in Q112, recording 10.6% y-o-y growth. The economic expansion in Q112 was fuelled by substantial government spending on Canal-related infrastructure, with the construction and transport subcomponents recording the most substantial outperformance at 26.7% y-o-y and 13.2% y-o-y respectively. We had initially seen the government's plans for modest fiscal consolidation as likely to result in a modest slowdown in 2012, forecasting real GDP growth of 8.1%. However, the recent government decision to boost the fiscal deficit ceiling from 2.0% to 2.9% in 2012 suggests significant upside risks to this forecast.

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