Panama reports economic activity decreased 2.94% in November 2023

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By Marco Echevarria

The Monthly Index of Economic Activity was impacted by the paralysis of sectors such as trade, transport, free zone and less shipflow through the Canal. Anti-mining protests impacted the trade, services and tourism sector, according to the report.

Monthly economic activity in Panama was affected in November 2023 by protests and roadblocks that curbed trade, land cargo transport, the departure of goods from some ports and special economic zones to Central America and other markets, as well as led to the cancellation of hotel reservations and suspension of cultural events and congresses.

The result, the Monthly Index of Economic Activity (IMAE) recorded an annual decrease of -2.94% in November 2023, compared to the same month in 2022. This result is less than 7.83% reported a year before that date, according to figures provided by the National Institute of Statistics and Census (INEC).

The report details that in November the activities that recorded falls were the commercial sector, the re-export of goods in metric tons carried out by the Columbus Free Zone, as well as the sale of 95-octane gasoline, diesel and liquefied gas for national consumption.

In October and much of November provinces such as Bocas del Toro and Chiriquí were held incommunicado, the dispatch of fuel, domestic gas and other inputs was interrupted for several weeks at the same time that the departure from these areas of crops of bananas, vegetables, legumes, milk, beef and other products also stopped.

The INEC report states that in the agricultural sector, activities such as banana exports and the cultivation of vegetables and legumes decreased in November, as did fishing activity and the catching of shrimp for export.

Food products such as the production of evaporated, condensed and powdered milk, pig and cattle slaughter were also reduced in November.

Services provided by hotels and restaurants were reduced, due to the low entry of travellers into the country.

The monthly construction activity was also affected by the low execution of public investment infrastructure and the private sector in November last year; in addition to the lower production of inputs associated with activity such as grey cement and premixed concrete.

The exploitation of mines and quarries also fell due to the closure of mining activity. After the mining moratorium that cancelled all concessions and procedures for this activity and then the declaration of unconstitutionality of the specific contract between Minera Panama and the Government by the Supreme Court of Justice.

Impact of the Channel’s water crisis on the economy

Another sector that reported less economic activity was maritime transport, specifically a lower flow of tons of cargo through the Panama Canal and the toll revenue from the interoceanic route. This was mainly due to the fact that in November the Canal reduced the number of transits to 31 per day due to measures to deal with the water crisis due to the prolonged dry season and the El Niño phenomenon.

Related to climate risk, hydropower generation was also reduced in November.

Activities that grew

Among the activities that showed positive rates in November were the sale of new cars and the sale of gasoline of 91 octanes.

Increased behaviour in storage and communications, the movement of TEU containers, air transport and telecommunications were presented to the transport services.

Financial intermediation due to positive movements of the credit portfolio and deposits in the banking system, in turn, the insurance activity showed a good performance in the premiums subscribed.

In the agricultural sector, pineapple exports and poultry farming increased in November.

In the electricity and water category, it increased by the generation of thermal power and the billing of drinking water.

In luck and gambling, the gross sale of chances and tickets from the National Charity Lottery increased in November. Like domestic services in private homes, the private health service and real estate, business and rental activities.

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