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Monday, May 29 2017 @ 11:34 PM AST

Scotiabank expects Panama economy to grow 5% in 2017, 5.5% in 2018

The Canal is working. Excerpts from a Scotiabank note on Panama last week:

ECONOMIC OUTLOOK

Growth: Panama remains the fastest growing economy in the American continent. Its privileged location as a regional hub for transport and logistics services, supported by the expanded inter-oceanic canal, has allowed the development of a thriving real estate market and dynamic construction activity (up 8% y/y in 2016).

Following a 4.9% expansion in 2016, real GDP growth will likely reach 5% this year and accelerate to 5.5% in 2018. The Panama Canal activity will remain affected by global trade dynamics, particularly in the corridor between Asia and the Americas. The domestic economy will continue to benefit from trade flows with the fast-growing Asia Pacific region and from an ambitious public sector infrastructure development programme.

Fiscal & Current Account Balance: The fiscal situation in Panama is improving on the grounds of increasing revenue stemming from canal traffic activity, structural tax reforms and sustainable domestic economic activity.

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