The MEF assures that Panama is experiencing economic recovery

Minister of Economics and Finance (MEF), Héctor Alexanderhe pointed out that the Panamanian economy has recovered strongly, it is creating formal jobs, poverty has decreased, and inflation is one of the lowest in the region.

During Executive meeting of the Chamber of Commerce, Industry and Agriculture of Panama (CCIAP)the minister confirmed that the country has just achieved full compliance with the 15 Actions of the Action Plan of the International Financial Action Task Force (FATF), which will help to proceed in the right direction to remove the said body from the list; as well as a list of high-risk third countries with strategic deficiencies, in their regime for preventing money laundering and combating the financing of terrorism of the European Union, which will enable the strengthening of international cooperation ties in this matter with Latin America, the Caribbean, Europe and the world.

Alexander explained that the Panamanian economy grew from 15.8% in 2021 and 10.8% in 2022outpacing global and regional economic growth, driven by sectors such as trade which contributed 28.4%, construction did the same with 22.6%, while transport and logistics accounted for 14.1%.

He emphasized that it is Foreign direct investment it remains crucial as it is up 49.3% through the third quarter of 2022. While the key role of Public Private Partnership (PPP) has been strengthened in infrastructure development in projects such as East and West Pan American Highway and the fourth line of Electrical transmissionwhich are in the phase of prefeasibility and feasibility.

Additionally, the National Government invests 18 billion dollars in public infrastructure, such as the construction of the metro, line 3 and the extension of line 1, the tunnel under the Canal, the fourth bridge over the Canal, electricity transmission projects, road maintenance, water treatment plants, environmental rehabilitation, construction and remodeling of educational centers, sports infrastructure, Ciudad Hospitalaria, among other investment projects. Not forgetting the productive fabric defense program with support for MSME for 460 million dollars.

According to the minister, 92% of created employment is formal. From September 2020 to April 2022, the number of employees increased by 214,672 people (13.2%). While formal employment increased by 196,738 persons (21.6%), the unemployment rate meanwhile decreased by 8.6%, from 18.5% in September 2020 to 9.9% in April 2022.

From January to October 2022, employment contracts registered in Ministry of Labor Development (Mitradel) they grew by 8.8% compared to the same period in 2021.

Speaking about the banking sector, Alexander specified that the Panamanian financial system proved to be solid because it withstood the consequences of the covid-19 pandemic and is still capitalized and liquid. Proof of this is that in April 2023, assets amounted to $141,461 million, 4.0%, compared to the same month of the previous year.

Also on the same date, they recorded an accumulated profit of 937.8 million dollars, 44.8% more than in the same month of 2022; and the liquidity index and capital adequacy index are significantly higher than what is prescribed by law.

“Although it seems impossible, Panama has reduced general and extreme poverty during the pandemic. In 2021, general poverty was 21% and extreme poverty was 9.5%, while total poverty in Latin America was 32.3% and extreme poverty was 12%, according to the data Economic Commission for Latin America and the Caribbean (Cepal)“, emphasized Aleksandar.