Panamá

Un análisis económico de la coyuntura reciente.

Abstract

This position paper analyzes the growth and inflation in Panama. Panama experiences a virtuous circle for economy: a balanced and sustained rate of long-term growth, and moderate levels of inflation. This phenomenon is what economists call the divine coincidence. As the role of the Government withdraws gradually, in order to strengthen the activity of the private sector, the macroeconomic conditions to sustain and recreate such coincidence as the new normal situation of the Panamanian economy will emerge. The diversification of the economy, the macro-fiscal prudence, the favorable perspectives of growth in key sectors (such as public utilities, mines and quarries, and transport, storage and communications; which are sectors that depend upon international commerce and service exports), and the mean reversion of inflation —even despite the economic and geopolitical uncertainties— are the cornerstones upon which the economic activity and the development model of the nation lay. Warnings about the possible wears of the model of discretionary expenditure in social fields, since the revenues of these interventions have lost power. If there is no shift in the focus of these interventions, they could disrupt the delicate balance needed to maintain and strengthen the divine coincidence at the economic level. Thus, the best policy today must be prudent, cautious and focused to develop social capital.