Panama Consumer Confidence Continues to Slide

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By Marco Echevarria

Levels of mistrust grew about the possibility of saving money and the economic situation of households over the next 12 months.

The Panamanian consumer confidence index (ICCP) stood at 71 points last November, 10 below the previous measurement (September 2023), which confirmed a pessimistic trend of Panamanians over their economic situation in the next 12 months, according to a study revealed on Tuesday.

In the poll measured by ICCP, 100 is the equilibrium point or “thermometer” of confidence and/or consumer mistrust in the development of their homes, the country, savings and jobs.

Last November’s study indicated that “there is still a downward trend, with a marked decrease in confidence in the future economic situation,” said Domingo Barrios, president of The Marketing Group, responsible for the survey he presents every two months in alliance with Panama Chamber of Commerce, Industries and Agriculture (CCIAP).

Levels of mistrust grew compared to the possibility of saving money and the economic situation of households over the next 12 months, with 70 points in November compared to 79 last September, and 74 points compared to 85 points, respectively.

The indicator on the outlook for the country’s overall economic situation for the next 12 months marked 51 points, 21 below the previous measurement, “slaying the loss of consumer confidence.”

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“The mistrust of unemployment also continued. The November measurement marks an index of 91 points, 3 above the previous measurement,” and revealed that “42 % consider that it will not have a job (in the coming year) while “52 % of respondents show a very low probability of getting employment in the next 6 months,” said a CCIAP statement.

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

There is more clouds in the Panamanian economy in 2024 in the face of the forecast of further interest rate hikes in the US, the expected fall in tax revenues due to the closure of the Copper Panama mine, the largest open sky in Central America, and the reduction of transits through the interoceanic canal due to drought.

In addition, there are fears about the loss of investment in the face of the state’s inability to curb public spending – with a public debt that increased by more than $20 billion in the last four and a half years – and of resolving the pension crisis, as risk qualifiers have warned.

This article has been translated from the original which first appeared in Panamerica