Panama Monthly Index Of Economic Activity - Moving Into Positive Areas

(MENAFN- Newsroom Panama) The
Monthly Economic Activity index (IMAE), which measures the basic monthly indicators of the production of goods and services in Panama, registered a moderate inter-annual variation of 3.95% in May of this year, according to the report published by the National Institute of Statistics and Census (INEC) of the Comptroller General of the Republic.
The figure reported in April is lower than the 8.43% published a year ago. Between January and May, the cumulative index also increased moderately by 2.17%.
This index usually provides clues as to how the gross domestic product (GDP) will behave at the end of the semester and subsequently the year.
The results for the month of May provide several insights. One of the most important is that the logistics sector continues to move towards positive ground, but the country continues to work in silos.
In the words of
economist Carlos Araúz,
Panama has an economy that has not fully connected or leveraged its comparative advantages.
"When we finally manage to get the Canal
and the ports to talk to the railroads, and these in turn to the Tocumen International Airport, passing through better roads, then we will achieve sustainable growth," Araúz explained.

Economist
Luis Morán
explained that the May IMAE reflected part of the electoral climate experienced by the country with the general elections. In this context, economic agents were more cautious when investing and consuming.
He added that in the coming months the economy is expected to see greater growth, and there is a positive expectation regarding the creation of new jobs and the reactivation of certain sectors such as tourism and construction, especially public works.
The INEC report details that, in May,
the transportation and communications sector
was favored by activities such as: cargo (in metric tons) in the National Port System, the movement of containers, commercial activity in the Colon Free Zone (ZLC), telecommunications and air transport.
On the other hand, net tons and Panama Canal
toll revenues continued to show negative rates, although lower than in previous months. Construction
activity
is being driven by public sector investment, due to the continuity of infrastructure projects such as Line 3 of the Panama Metro, although the performance of private investment has shown little dynamism.
The credit portfolio and deposits of the banking system continue to maintain an upward trend. On the other hand, there was a condition for a decrease in premiums or new insurance policies.

Fishing activity reported a positive rate, resulting from a greater catch of shrimp, fish and fish fillets (fresh, refrigerated and frozen), species destined for export.
Hotels and restaurants reported an upward trend, driven by the arrival of tourists and visitors to the country and the purchase of various goods and services.
In the commercial sector, the activities that showed a positive rate were the re-exports of goods from the ZLC, the sale of 95-octane gasoline and the number of new cars registered in the vehicle registry.
However, the following items recorded negative results: the value of imports, 91-octane gasoline, diesel and liquefied gas for domestic consumption.
Industrial production showed a favorable performance, due to the increase in the production of some food products such as evaporated, condensed and powdered milk; tomato derivatives; alcoholic and soft drinks; and the production of chicken meat.
Agricultural activity had a negative variation, due to activities such as cattle and pig breeding and the cultivation of bananas and pineapples, destined for export. However, an increase was observed in poultry farming, and the cultivation of watermelon and tomatoes.
Hydro and solar power generation increased, while thermal and wind power generation decreased.
Mining and quarrying operations continue to be negatively affected by the cessation of operations by Minera Panamá and the mining moratorium.

Araúz recalled that
the last two years have represented great challenges when using the IMAE as a comparative element of economic dynamism in Panama.
The country has experienced two major moments of street unrest, in July 2022 and November 2023, which created major distortions, depending on the sector under study.
"Although the IMAE reports a positive variation at the end of May of this year, this movement is not enough for a full awakening of micro-enterprises, which have not yet recovered from the pandemic and the fateful 2020-2021," said the economist.
The growth potential, without inflationary vices, of the Panamanian economy is around 5.5%, so the upward movement should be much stronger, said Araúz.
One notable factor that the IMAE does not measure is
the level of consumer confidence, as well as the hiring plan in the formal sector.
“There is a general mood of positivism regarding the implementation of a spending containment plan by the new administration of President José Raúl Mulino, as well as the intention to pay state suppliers the whopping sum of $877 million. In view of the end of the year, this exercise of placing cash flow on the street by the Government is essential to revive the battered small and medium-sized businesses,” he said.
The private sector and analysts are betting on a different year-end than 2023, with a commercial sector that will receive a boost from the
Black Weekend
in September and the end-of-year festivities in December.
In addition,
the dry season will offer new opportunities to attract tourists looking to escape the cold, and the construction sector
should have more clarity on the prolongation of the preferential interest rate regime.

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