Consumer confidence continues its downward trend

Panama’s index of consumer confidence (ICCP) remained at 71 points last November, 10 below the previous measurement (September 2023), confirming a pessimistic trend among Panamanians about their economic situation in the next 12 months, according to a study published this Tuesday.

In a survey measured by the ICCP, 100 is the balance point or “thermometer” of consumers’ confidence and/or distrust in the future of their homes, country, savings and jobs.

A study from November last year showed that “the downward trend continues, with a marked decrease in confidence in the future economic situation”, he stated. Domingo Barrios, President of The Marketing Groupresponsible for research presented every two months in collaboration with Chamber of Commerce, Industry and Agriculture of Panama (CCIAP).

The level of distrust in the possibility of saving and the economic situation of households in the next 12 months has increased, with indices of 70 points in November compared to 79 last September, or 74 points compared to 85 pointsrespectively.

The indicator on the prospects of the general economic situation in the country for the next 12 months recorded 51 points, 21 below the previous measurement, “showing a loss of consumer confidence”.

“Distrust regarding unemployment continued. The measurement in November recorded an index of 91 points, 3 more than the previous measurement”, and revealed that “42% believe that they will not have a job (in the next year), while ” 52% of those surveyed show a very low probability of getting a job in the next 6 months,” said the CCIAP press release.

Panama’s economy grew by 8.8% of gross domestic product (GDP) in the first half of this year, and was expected to do so by at least 6% in 2023, but the national crisis due to the operation of a large copper mine that left losses estimated at 1.7 billion dollars will reduce that forecast by at least 1%, according to local analysts.

There are more dark clouds for the dollarized Panamanian economy in 2024 due to the forecast of further increases in interest rates in the US, an expected drop in tax revenues due to the closure of the Cobra Panamá mine, the largest open-pit mine in Central America, and a decrease in transit through the Interoceanic Canal due to drought.

In addition, there are fears of a loss of investment grade due to the government’s inability to rein in public spending – with public debt rising more than 20 billion dollars in the last 4 and a half years – and solve the pension crisis, as warned by risk assessment agencies.