Less fuel purchases reflect slowing economy
The sale of 91 and 95 octane gasoline was lower by almost 400 thousand gallons than last year, according to the National Energy Secretariat.
Between January and September, 82 million 284 thousand gallons of gasoline were sold, while in the same period last year 82 million 681 thousand gallons were invoiced.
The slowdown in activities such as trade and construction take their toll. If there are fewer businesses in these two economic segments, the number of work cars that are driven will be lower. Also, facing traffic congestion, many drivers decide to use the car less and opt for public transport, experts say.
The drop in the sale of new vehicles has also influenced by fuel consumption. In the first nine months, 37,078 new cars were sold, 5,436 fewer than in the same period last year.
A greater drop in sales was registered in diesel. In nine months they sold 2.6 million gallons less than last year, compared to 92.1 million gallons sold this year, against 94.7 million gallons in the first nine months of 2017.
This fall in the sale of diesel is related to the completion of some projects where this product is used during the development of the works to transport materials such as sand, stone, steel, cement, among others.
We consulted on this topic to the expert in the hydrocarbons market Harry Quinn , who affirms that "obviously having less growth in the gross domestic product of the country, some activities are slower".
One of the facts that reduced economic growth was the 30-day paralysis of construction workers, which stopped contributing $ 900 million to the economy, according to the sector’s calculations.
This unemployment reduced the rate of growth in different activities, since construction is one of the main engines in the country.
"The Panamanian economy is growing, but not at the same pace as last year. Some indicators that affect good performance are decreasing. "
"There is a slowdown due to the decline in economic growth in a consecutive way, which is equivalent to driving in a 60-kilometer vehicle when it used to go at full speed," says Olmedo Estrada , president of the National Association of Economists. "Those $ 900 million that were stopped producing in the month of the strike, did not recover. The economy, instead of moving with a different dynamism, stopped, "he added.
2018 is expected to close with a 4% growth. However, for the next year there are the presidential elections, the World Youth Day and many projects that represent strong investments and that could encourage economic growth to reach 5%.
In the budget projection for the fiscal period of 2019, it was defined within an environment of real economic growth of 5.9% of gross domestic product (GDP) , inflation of 1%, a total deficit of 1.5% of GDP and an adjusted fiscal deficit 0.50% in compliance with the Fiscal Social Responsibility Law, which continues to place Panama within a responsible performance, which allows a healthy development of the economy.
Other organizations such as the World Bank say that Panama continues to be one of the three fastest growing economies in the region, along with the Dominican Republic and Bolivia. And according to the bank’s estimates, the country will grow by 5.4% by 2019 and 6.3% by 2020.