Panamanian Economy Grows 8.2%

(panamanewsbriefs.com)  By Marianela Palacios Ramsbott for La Prensa - The Panamanian economy Panama, measured through the Monthly Index of Economic Activity (IMAE) published yesterday by the Nation's Comptroller, grew at a rate of 8.2% in the first semester of 2008. This level of growth represents a deceleration of more than 2% when compared to the same time period of 2007, but the growth rate continues to be "very strong" and one of the highest in Latin America. In this the President of the School of Economists, Raul Moreira, and financial analyst Domingo Latorraca of Deloitte agree. Economic activity in Panama grew 10.58% last year. “The deceleration we have had is not alarming. On the contrary, if we continued growing at that rate we could face an overheating of the economy that will manifest itself in increased inflation," said economist Adolfo Quintero. The School of Economists estimates that the inflation rate in Panama in 2008 will be 8.7%.

Editor's Comment: According to the Inter American Development Bank the average growth of GDP in Latin America in 2009 will be 4.88%. Panama continues to lead economic growth in Latin America, easily outpacing most other countries. The entire region is suffering under the same external pressures we face here in Panama, principally higher costs for fuel and food. Again according to the IDB, The average rate of inflation in Latin America is 8.95% - so what we are seeing here in Panama is equivalent to what everyone else is seeing. The difference is that in Panama the growth of our economy is keeping pace with inflation. Obviously there's no 1 to 1 correlation, but in general terms what you want to see is a growth of GDP that's higher to the rate of inflation in order to grow, strengthen, and improve your economy and the standard of living for all citizens.

Panama's Tremendous Advantage: Panama is one of the few countries in Latin America where growth in GDP will basically keep pace with inflation. In short, it's effectively a wash. In neighboring countries they are seeing a "virtual recession" in that while their economies might be growing by 4% or 5%, those gains are being eaten up by inflation at almost 9%. So, while they are effectively sinking economically speaking, we are at least treading water. And, Panama is about the only Latin American economy enjoying this position.