Growth of 8.8% in Panama's Gross Domestic Product for the First Semester of 2023

During the first half of 2023, Panama experienced a remarkable 8.8% growth in its Gross Domestic Product (GDP), signaling a significant economic development. This surge in growth, compared to the same period last year, resulted in a substantial exchange of goods and services amounting to $38,100.6 million—a notable increase of $3,070.5 million from the first half of 2022.

Upon analyzing the data provided by the Comptroller's Office, it becomes evident that the economic landscape displayed heightened dynamism in the first quarter, with an impressive 9.3% growth compared to the previous year. This momentum continued into the second quarter, contributing to an overall growth rate of 8.8% for the first half of the year.

Several key sectors played a pivotal role in driving this economic upswing between April and June. These sectors include construction, permits, wholesale and retail trade, manufacturing, electricity and water, restaurants, and land transportation. Notably, the Metro and MiBus experienced a substantial increase in passengers, with a growth rate of 15.7% and 6.1% respectively. Additionally, sectors such as corridor capacities, telecommunications, financial services, real estate, and business services demonstrated robust performance.

However, it is important to note that certain sectors experienced a decline during these months. This includes health services, hydropower generation, which experienced a significant decrease of 37.9%, and cattle slaughter, which decreased by 2.8%.

Contributing positively to the economic surge were increased activities in air transportation and a noteworthy 15% rise in tolls on the Panama Canal during this period.

Export sectors also displayed notable trends, with banana exports surging by 33.3%, fish by 30.6%, and port activities showing a positive, albeit moderate, increase.

Despite the overall growth, challenges are looming on the horizon. The mining contract protests have led to disruptions in various sectors, such as tourism, agriculture, and general commerce. As a result, it is anticipated that the growth rate may slow down towards the end of the year.

To provide further insights, economic forecasts from reputable sources shed light on the situation. The World Bank projects a year-end growth rate of approximately 6.3% for Panama, highlighting the persistent challenge of reducing inequality. Meanwhile, the International Monetary Fund revised its projection from 5% to 6% two months ago, offering insights into the economic landscape before the mining contract crisis.

As we navigate through these economic dynamics, the eventual update to growth projections, accounting for recent events, will play a crucial role in shaping the general state budget for the upcoming year. With less than a month remaining in this fiscal year, the exact figures are yet to be disclosed, leaving stakeholders eager to know the economic trajectory in the months ahead.