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Light and shadows on the Panama horizon

Posted 13/04/2022

Little by little, the country begins to normalize its activities, abruptly interrupted by a pandemic that seems under control, although it is not over yet. It is, therefore, good news, which is reflected in the Government's current income, which even exceeds what was budgeted for the first quarter of this year, as well as the exercises of immediately previous years.

This gives relief to an economy that continues to suffer the consequences of the pandemic and represents hope for thousands of Panamanians who lost their jobs, who became informal or who saw their income reduced.

However, the way in which the Government spends the funds that are so hard to obtain is worrying. In the years of the pandemic, it has been notorious that the Government has not made the slightest effort to execute a cost-containment plan; we saw how each year the national budget increased, balanced with the contracting of debts that add up to billions of dollars; that the State payroll increased, responding to mostly clientelistic criteria. We hope that this injection of fresh money is used sensibly and not as campaign funds for the 2024 race, in favor of the ruling party. – LA PRENSA, Apr. 13.

https://www.newsroompanama.com/opinion/light-and-shadows-on-the-panama-horizon

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Panama economic activity up 12.8 % in the first two months

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Posted 21/04/2022

The monthly index of economic activity increased of 12.8% in the accumulated period of January and February compared to the same period of the previous year, reports the National Institute of Statistics and Census (Inec).

February is the eleventh month in a row of increases in the monthly activity indicator compared to its similar figures from the previous year, a streak that contrasts with the 12 months in a row of falls registered between April 2020 and March 2021, in the midst of the pandemic.

The Inec  reports growth in activities such as construction, commerce, hotels, and restaurants, transport, storage and communications, electricity and water, manufacturing industries, real estate, agricultural and financial intermediation activities, among others.

The president of the Chamber of Commerce, Industries and Agriculture, José Ramón Icaza, said: "The Imae of 12.8% as of February is not surprising, but as the year progresses the rate of growth should slow down because more similar periods will be compared," he said. Regarding the reactivation, Icaza said that it has not been the same for all sectors, highlighting the lag that exists in activities such as tourism.

Economist Felipe Chapman pointed out that last year there was unprecedented growth in the economy that no one expected (15.3%), something he described as good news for the country. On the Imae of the first two months of the year, he said it registers good behavior, also acknowledging that it is compared to the months of 2021 with restrictions.

Shadow of Ukraine
The indicator, however, still does not reflect the consequences of Russia's invasion of Ukraine, which translates into an increase in the prices of fuel, food, fertilizers, and inputs necessary for the economy. This will lead, according to the expert, to a decrease in consumption data and, consequently, a lower speed in the Imae and the gross domestic product.

The economist Luis Alberto Morán pointed out that the data to February reflect signs of recovery, and warns that attention should be paid to the lagging and most vulnerable sectors. “At the economic level, the data should lead us to establish policies that also allow the improvement of the labor market, which is still slow.

https://www.newsroompanama.com/business/panama-economic-activity-up-128-in-the-first-two-months

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Shanghai lockdown affecting Panama and Latin America

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Posted 26/04/2022

With the latest outbreak of coronavirus in the city of Shanghai, strict confinement has been put in place as part of China's "Zero Covid" strategy,  triggering delays in the logistics chain in the largest port by volume of containers.

In 2021, the Shanghai terminal represented 17% of China's container traffic and 27% of the Asian giant's exports. It is among the most important in international trade, and now thousands of containers are piling up, putting additional pressure on global supply and Latin America's inflation crisis.

There is already talk that at least 20% of the container ship fleet is trapped without being able to unload its cargo. According to Vessels Value, a provider of maritime data, the waiting time for ships in the port of Shanghai is around 50 hours.

The tail end for Panama is imminent and for the president of the Panama Industrial Union of a (SIP), Luis Frauca, in the next two weeks delays will begin to be perceived in the arrival of merchandise from China.

For the industrial sector, the delay could exceed five weeks, which will affect the availability of goods such as construction materials, supplies for the industrial sector, electronic equipment, clothing, and footwear, among others.

According to the Comptroller General, the price of some materials used in construction, such as electrical wire and steel rods, increased between 19% and 40% during the first quarter of 2022.

Carlos Allen, president of the Panamanian Chamber of Construction (Capac), described the situation of the port of Shanghai and the shipment of cargo to Panama as complicated. “It is the most important port in the world and has reduced its capacity by more than 35%. and is going to affect the construction materials that are imported, in terms of price and availability”.

Allen indicated that steel, tiles, electrical products, and special fire-fighting systems are among the materials imported through Shanghai.

Information published by Janus Henderson, a British global asset management group, washing machines, vacuum cleaners, solar panels, electronic components, and textiles top the list of products that are exported through the Shanghai terminal.

https://www.newsroompanama.com/news/shanghai-lockdown-affecting-panama-and-latin-america

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New car sales up 17% as availability clouds future

Posted 02/05/2022

The sale of new cars totaled 9,371 units in the first quarter up 17.7%  from the 7,963 units in the same period of the previous year, according to data provided by the Association of Automobile Dealers of Panama (ADAP).

The increase is explained by a recovery in demand as in 2021,  there were business closures ordered by the authorities to contain the second wave of coronavirus

The results of 2022 also improve on the data of the first quarter of 2020 (9,112 vehicles), partially affected by the first restrictions of the pandemic, but still far from the records of 2019 (11,292).

While the worst of the pandemic is to be behind us, and while demand is responding, the current concern for the industry is supply and, the ability to meet existing demand.

For the second quarter, the sales expectation is lower than that of the same period of the previous year due to the lack of capacity of manufacturers to meet the needs of the market.

The brands are affected by the limited supply of microchips and semiconductors, and this ends up ultimately translating into greater delays in the shipment of vehicles.

Bogdan Batinovich, president of the ADAP said that before this situation occurred, there was sufficient inventory of any product, while currently, the inventory is limited and in some cases as vehicles are delivered because they are pre-sold.

Car prices
On the other hand, the inflationary pressures caused by the increase in the cost of raw materials, the increase in fuel, and the tensions in the supply chain are also transferred to the price of cars.

Despite the challenges that exist, the industry expects supply capacity to improve as the year progresses and has growth expectations of around 17% for the whole of 2022, with a sales volume of around 45,000 units.

https://www.newsroompanama.com/business/new-car-sales-up-17-as-availability-clouds-future

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Ukraine conflict and China covid policy hit Panama

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Posted 08/05/2022

The pressure of the conflict between Russia and Ukraine on oil and energy; China's zero Covid-19 policy and its reach in supply chains, in addition to the historical inflation in the United States, are some of the factors that are impacting the lives of Panamanians says Panama’s Chamber of Commerce, Industries and Agriculture of Panama (Cciap) in its weekly  newlettersegmen

"Such a situation demands, more than ever, that both the National Government and the private sector develop a dialogue aimed at identifying and executing actions that reduce the impact of these factors on national life," said the Chamber, chaired by Marcela Galindo de Obarrio.

To promote more jobs, support for small and medium-sized companies is key as the undisputed engine of our economy, indicates the organization, which also values the option of part-time jobs as an alternative for those who cannot access full-time work; as well as the remote employment modality.

“On the other hand, in order to achieve energy stability, it is crucial to maintain the focus on actions that are no longer long-term, such as accelerating the diversification of the energy matrix; increasing the capacities of our mass transportation, as well as encouraging the use of electric vehicles”, stated the Cciap.

The chamber emphasized that in a situation like the current one, unilateral actions or actions without due support "will only make the consequences of the international energy and economic situation harder for our country and its citizens."

https://www.newsroompanama.com/business/ukraine-conflict-and-china-covid-policy-hit-panama

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State payroll at “unsustainable” $4 billion

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Posted 12/06/2022

Panama’s Chamber of Commerce, Industries and Agriculture (Cciap) has called on the Ministry of Economy and Finance and the General Directorate of Revenue to be accountable for the impact  of unsustainable” expenditure.

In its weekly bulletin, the chamber said that the state payroll has reached historic levels: close to $4, billion in 2021.

“If we add to this the increase in subsidies –$1.6 billion in 2019 vs. $2.4 billion to date– coupled with the high amounts of other types of expenses, we are facing extraordinary figures for State money that warrant an immediate review with a view to making adjustments and guaranteeing the sustainability of public finances,” the organization said.

The Cciap pointed out that, after two years of sacrifices as a result of the crisis caused by the covid-19 pandemic, actions that reflect containment, austerity, and control of expenses are unknown.

Therefore, for the organization, it is time to define a plan to offset some subsidies and start investing this money in actions and plans that add value to society and the individual.

“Given the complicated economic situation we are experiencing, where there are external factors that affect the lives of all citizens, the private company has made its share of sacrifice, acting in accordance with the times. This is what we also require from both the Executive and Legislative Branches,” it emphasized.

The government has justified that part of the growth in payroll spending has to do with laws that order periodic increases in the salaries of some officials.

https://www.newsroompanama.com/business/state-payroll-at-unsustainable-4-billion

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Tax collection up 21% in 5 months

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Increasing economic activity.

Posted 29/06/2022

Higher levels of economic activity so far this year are reflected in  government tax collection.

Of the $2,661.8 million in current revenue collected by the Government in the first five months of the year, tax revenue represents a majority of 79%, according to a recent report by the General Directorate of Revenue (DGI). Within tax revenues, both direct taxes ($1,184 million, 17.4% more) and indirect taxes ($910.2 million, 30.2% more) grew.

The income tax declared by companies grows in an environment of greater economic activity. In March of this year the income tax was paid based on the results of the 2021 financial year, a period of more activity than 2020, when there were strong restrictions on the economy due to the pandemic.

15% Discounts
In the real estate tax, whose collection grew 37.5% year-on-year, the prompt payment measure would be reflected, which this year was more extensive and with a higher percentage. The DGI granted a 15% discount for those taxpayers who paid the property tax for the entire year before the end of April. This measure is usually until February and with a 10% discount.

Indirect taxes, for their part, are an indicator of consumption behavior. The tax on the transfer of personal property and services (Itbms) on sales generated $338.6 million in the first five months of the year, an increase of 37.4% when compared to the same period of the previous year, while the selective consumption tax records an increase of 34.9%.

Non-tax revenues, , generated $551.8 million, 20.1% more than the previous year, the main component of this group being tolls and Panama Canal services, which contributed $247.9 million.

https://www.newsroompanama.com/business/tax-collection-up-21-in-5-months

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Unemployment drops but most new jobs are informal

Posted 02/07/2022

In the last six months, more than 100,000 jobs have been added to the economy, which means a recovery in the labor field, where the unemployment rate went from 11.3% in October 2021 to 9.9% in April 2022.

Jobs were lost in agriculture, in the information and communication sector, administrative activities, and in the health segment.

There were higher levels of expansion in construction, with 14,222 (13% increase); industry, with another 14,004 (13%), and service activities, with 13,054 (12%) additional positions.

Transportation and logistics gained 12,915 or 12%; commerce recorded some 11,616 (10%) positions, and the Government had an upward variation of 11,294 (10%).

However, most of the new jobs are in the informal sector. When self-employed workers and employers are counted in construction, 98% of labor expansion is categorized as informal employment.

The same happens in the industry, where of the 14,000 new jobs, 10,084 were self-employed, and 3,648 new employers. In domestic service, which achieved 4,428 new jobs, 100% informality is observed.

Informal workers are considered to be employees of a private company without a work contract, independent workers, employers whose companies have less than five employees, people who provide domestic services, and family workers. In summary, the country has added 60 thousand additional workers to the informal sector in less than a year.

In October 2021 there were 677,875 informal jobs, while for April 2022 the figure stood at 737,922. This implies that informality is monopolizing 48.2% of the non-agricultural employed population of the country.

Of the total number of people with informal employment, 59.2% worked on their own account, 26.4% had a salaried job, 8.1% was a domestic service employee, 3.3% a family worker, and 3% an employer.

Most of the informal workers do not contribute to the Social Security Fund, which demonstrates part of the precariousness of their condition, as they are not making the contributions to the worker-employer quota that they need for the moment they retire.

In Latin America and the Caribbean, nearly 140 million workers work in the informal sector and have been strongly impacted by covid-19.

Guy Ryder , director of the International Labor Organization (ILO), warns that there can be no true recovery from the pandemic without a broad recovery in the labor market. “And, to be sustainable, the recovery must be based on the principles of decent work, including health and safety, equality, social protection, and social dialogue.”

https://www.newsroompanama.com/business/unemployment-drops-but-most-new-jobs-are-informal

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OPINION: Panama’s ticking time bomb

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Posted 04/07/2022

The country's industrial sector is asking the Government for fiscal measures to prevent the high cost of importing goods and services from fully reaching the consumer. It is a temporary relief for a temporary situation, to which will be added the world recession that has already been warned and for which we have to prepare ourselves because to some extent it will affect us all, some more than others, but all of us. The warnings are on the table, so you also have to think of some more solutions to the problem that lies ahead. It will take the government to act in time, not when we are in the middle of a crisis – like the fuel or medicine crisis – where it acted only because social pressure forced it to do so. The Government needs to direct its efforts to the sectors that really need it, but they will not achieve it if the squandering continues on the state payroll, in subsidies for friends: they will not achieve it if they squander on parties, banquets, or unjustified salary increases. While the people live in hell, a caste of politicians lives in a paradise that we pay for with sweat and, not in a few cases, with tears and suffering. And that is creating a ticking time bomb. LA PRENSA, Jul. 4.

https://www.newsroompanama.com/business/opinion-panamas-ticking-time-bomb

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Doubts over impact of government austerity moves

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Posted 28/07/2022

Economists and rating agencies have expressed doubts about the impact of austerity measures announced by the Panama government.

The measure that drew the most attention was the start of a process to reduce the public payroll by 10% generating questions over whether it would be a reduction in the number of people or a decrease in the amount of wages paid.

The director of the National Budget, Carlos González, explained that the objective is the reduction in the monthly amount of the payroll.

He said that they took as a basis the spending of the month of April of the "affectable payroll", that is, the one that is part of the Executive, thus leaving the National Assembly and the Judicial Branch out of the scheme.

The "affectable payroll," González said, consists of some 220,000 officials and a monthly salary of $356 million. Thus, 10% represents $35.6 million.  The Ministry of Economy and Finance (MEF) expects between August and December 2022 a joint savings of $205 million.

Each institution will be informed of a reduction fee for their spending. This will be done through a worktable in which the MEF itself, the Presidency and the General Directorate of Administrative Careers participate.

González said that the entities will define how to achieve that quota, but that the first alternative will be through the natural rotation of personnel.

The risk rating agencies Moody's and Fitch have recently pointed out that at this juncture the challenges to meet the deficit goal rise. On the austerity plans, Fitch believes that “it is unlikely that large and rapid savings will be realized through these measures”.

https://www.newsroompanama.com/news/doubts-over-impact-of-government-austerity-moves

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40 companies in line for $1.5 billion tax bonus

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Posted 31/07/2022

Some  40 hotel projects were lined up to take advantage of two laws approved by the government of Laurentino Cortizo, which require the State,  to reimburse investors all the money they spent on tourist infrastructure outside the district of Panama.

Tourism Minister Iván Eskildsen revealed that these companies had submitted their request for certification to the Panam Tourism Authority (ATP) to become creditors of the stipulated tax benefits in Laws No. 122 of 2019 and No. 314 of 2022. Of this total, 23 had already registered their issues with the Superintendence of the Securities Market (SMV) reports La Prensa.

He failed to reveal that when the country is facing financial hardship these projects with ATP certifications would represent more than $1.5 billion that the State had to sacrifice by issuing tax credits in favor of the investor who acquired bonds, shares, or other financial instruments issued by the tourism companies to finance the development of their projects.

Eskildsen's statements were delivered as a result of the mandate by President Cortizo’s decision to repeal the laws.

Eskildsen said that "social peace became the priority of the national government, hence President Cortizo's decision to present a bill to the Assembly to repeal existing laws."

Cortizo stated that the law that repeals the current regulations will be retroactive.

Carlos Barsallo, lawyer and president of the National Securities Commission, recalled that when talking about legal certainty, one should not think about protecting future expectations, but about investments that have already been made.

In this sense, it would not matter how far the projects have advanced with their certifications and the processes of listing their emissions in the SMV.

Unfair laws
Barsallo  said, that the laws that will be repealed are unfair and disproportionate because they break with tax equity, where each one must contribute according to their capacity.

And they are disproportionate, he said, because there is already a wide variety of incentives for the hotel sector and also for investors. "This came add an exaggerated, disproportionate incentive and that made it unfair."

Law No. 122 of 2019 allows companies or natural persons that acquire bonds, shares, or other financial instruments issued by tourism companies with projects outside the district of Panama, to receive a 100% income tax credit for the sums invested.

https://www.newsroompanama.com/news/40-companies-in-line-for-15-billion-tax-bonus

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Corruption and weak judicial system hamper  Panama investment - US report

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Posted 03/08/2022

High levels of corruption,  a weak judicial system a reputation for unpaid government bills,  and labor unrest hamper Panama’s Investment climate says a US State Department report although it praised the country for having one of the best growth rates in the region.

The report also highlights that Panama's presence on the gray list of the Financial Action Task Force (FATF) since June 2019 due to systemic deficiencies in the fight against money laundering and terrorist financing, increases the risk of investing in Panama.

Panama's investment climate is described as mixed, since at the same time, during the last decade, Panama was one of the fastest growing economies in the Western Hemisphere.

Its economic recovery from the covid-19 pandemic is outpacing most other countries in the region, with a 15.3% growth rate in 2021 (after a 17.9% contraction in 2020) and a projected growth rate of 7.8% by 2022, according to the World Bank.

Panama also has one of the highest GDP per capita rates in the region and has several investment incentives, including a dollarized economy, a stable democratic government, the second largest free trade zone in the world, and 14 international agreements. of free trade.

Similarly, it highlights that although the Panamanian market is small, with a population of just over 4 million, the Panama Canal provides a global commercial center with incentives for international trade. The US State Department document adds that the Government of Panama is eager for international investment and has several policies to attract foreign direct investment (FDI).As such, it continues to attract one of the highest rates of FDI in the region, at $4.6 billion in 2020, according to the US Bureau of Economic Analysis.

As of March 18, 2022, Panama's sovereign debt rating remains investment grade, with ratings of Baa2 (Moody's), BBB- (Fitch), and BBB (Standard & Poor's with a negative outlook)i

Covid vaccinations
The study underlines that Panama's high vaccination rates of 80% of the eligible population with at least one dose and 70% with at least two doses as of March 21 have contributed to its economic recovery."

“As the global economy recovered, Panama's service-dependent industries and infrastructure recovered significantly in 2021," the document reads.

The sectors with the highest economic growth in 2021 included mining (an increase of 148%), construction (29%), and commerce (18%).

https://www.newsroompanama.com/business/corruption-and-weak-judicial-system-hamper-panama-investment-us-report

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Panama hopes to exit Financial Task Force gray list next month

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Posted 19/08/2022

The Vice Minister of Finance, Jorge Luis Almengor, reported that a new plenary session with the Financial Action Task Force (FATF) is scheduled for  September, where significant progress and evidence will be presented so that Panama can get out of the discriminatory list, in the which has been since 2019.

According to Almengor, the country has already fulfilled 11 of the 15 points of the FATF action plan and by 2022 the recognition of the fulfillment of four of those actions has been obtained.

These actions consist of the establishment of an ecosystem that is integrating all public institutions related to issues of prevention and combating the financing of terrorism and crimes related to money laundering.

However, for Almengor, the support of the justice system is lacking, which is key to achieving the effective objectives of the regulations.

The Government insists that Panama has continuously presented significant and tangible progress that

include legislative changes, exhaustive development of risk analysis, implementation of regulations, development of a registry of the final beneficiary, and the increase in focused investigations in predicate offenses abroad, among other aspects.

https://www.newsroompanama.com/news/panama-hopes-to-exit-financial-task-force-gray-list-next-month

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IMF warns of consequences if Panama stays on gray list

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Posted 29/08/2022

The International Monetary Fund (IMF) warned of the possibility that commercial and financial transactions with Panama would be subject to " intensive due diligence " if the country fails to complete in October the action plan it is carrying out with the Financial Action Task Force (FATF) to get off its gray list.

The alert reiterates what the FATF itself said last June when it updated Panama's progress in the action plan. Until then, Panama had completed 11 of the 15 points, pending the dissuasive sanctions, the improper use of legal persons and structures, the nominal directors in corporations, and the full implementation and operation of the Registry of Final Beneficiaries.

Panama has been on the list since June 2019. Technically it is the list of jurisdictions that the FATF puts under monitoring with an action plan for its strategic deficiencies in the fight against money laundering and the financing of terrorism, but commonly known as the gray list.

The action plan for Panama was originally supposed to be completed in January 2021, but by that time, the country did not show significant progress, so it remains on the list.

Black list hint
At the time, the Gafi presented " significant concerns " about the non-compliance of Panama. The FATF president at the time, Marcus Player, even hinted that if the action plan is not completed, Panama could be included in the black list, which only includes Iran and North Korea.

The Minister of Economy and Finance, Héctor Alexander has said that Panama is working hard to get off these lists.

In the IMF evaluation published weeks ago, the financial institution also urged the country to complete an action plan to get out of the list. The FATF reiterated in its assessment that if by October Panama did not satisfactorily complete all the recommendations of the action plan, they would have to ask all the jurisdictions under its umbrella for comprehensive risk analysis for commercial relations and transactions with Panama. Also weighing on the country is the inclusion in the list of the European Union of non-cooperative countries in tax matters, especially for the exchange of tax information.

 

https://www.newsroompanama.com/news/imf-warns-of-consequences-if-panama-stays-on-gray-list

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Panama's GDP  up 9.8% in second quarter

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Posted 16/09/2022

Panama had a Gross Domestic Product (GDP) growth of 9.8% for the second quarter of 2022 compared to the same period last year.

The Comptroller details that the quarterly GDP registered an amount of $9,925.7 million for the April-June period, which represents an increase of $886.6 million over the previous year. For the second quarter of 2021, the amount was $9,124.9 million.

This, was after economic activities continued their recovery process after a prolonged period of sanitary restriction measures due to the covid pandemic.

The activities related to the economy that had a positive performance in the quarter were: transportation and communications, commerce, construction, and manufacturing industry.

The added values generated by activities related to the rest of the world that presented increases are the Panama Canal due to the increase in its income from tolls by 2.4%, mainly, transit of Panamax ships by 14.3%; re-exports from the Colon Free Zone at 20.6% and air transport; as well as pineapple exports at 47.5% and watermelon at 53.8%.Exports of bananas and fish showed decreases.
Mining and ports
 Income generated by the mining sector was lower than that registered in the same period of the previous year. Likewise, port operations are the product of the lower movement of bulk cargo by 15.9%. In the agricultural sector, banana exports fell by 55.7% and fish by 17.3%.

In the period from January to June 2022, the GDP reached an accumulated growth of 11.8% compared to the same period in 2021, said the institution.

https://www.newsroompanama.com/business/panamas-gdp-up-98-in-second-quarter

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Panama refines strategy to deal with the review of the TPC with the United States.

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The Minister of Foreign Affairs of Panama, Erika Mouynes, said on Tuesday that the United States has not yet “not” given the country a date to review the trade promotion treaty (TPC) and the tariff relief of sensitive lines, so they are advancing a strategy before that meeting takes place. “

We formally raised the interest of reviewing the reduction calendar (arancelaria), particularly for sensitive products; and just yesterday (Thursday, September 15) we had a meeting with the pig and poultry sector, also fine-tuning the strategy a little,” Mouynes said.

He indicated that he also met with the Ministry of Agricultural Development (Mida) and now he is going to.

He recalled that the request for the review of the TPC and the tariff relief of sensitive lines (rice, pork and meeting pieces and chicken thigh) was presented to the United States last April, and he already received it and replied last May formally, saying that they were willing to meet.

However, “no” a meeting date has been established. “We asked for the meeting and they gave us the answer. So far we are technically with them and now we have to set,” said the Panamanian chancellor. Therefore, he stressed that before going to a meeting you first have to have a strategy. “It is part of what we were doing and that will continue to refine a country strategy, which is led by the president on how to deal with an issue (TPC) that is very delicate,” Mouynes said.

The Panamanian Foreign Minister referred to it on Friday, September 16, in a courtesy of a room behind closed doors offered by members of the National Council of Private Enterprise

foreign policy priorities, particularly with the United States, but this has to be consistent with the national reality, and part of that exercise is to listen. “

What we come to do is to raise what we are doing and also to listen to their assessments from each of these sectors,” Mouynes said.

He insisted that they have to be sure that it is corresponding to reality, every time the country is on the international platform.

The president of the CoNEP, Rubén Castillo, for his part, said that in this meeting he will insist on “National producers must be supported, that is essential to ensure the safety and sustainability of the sector,” he said.

Regarding when the strategy would be ready, Mouynes said that after the meeting on Thursday, September 15, where the specific technical proposal was presented, they must meet with the Ministry of Commerce commercial team. Once it is agreed and endorsed by the president, then the strategic proposal would be presented.

Panama and the United States signed the TPC on June 28, 2007 and entered into force on October 31, 2012. The tariff relief begins this year (2022), with rice and chicken (piece of thigh meeting), which will allow the US industry to pay a lower tariff and as a consequence cause the Panamanian market to be flooded with imported products.

https://panamaadvisoryinternationalgroup.com/blog/news-from-panama/panama-refines-strategy-deal-review-tpc-united-states/

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Economic activity  in Panama up 11.8%

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Posted 25/09/2022

The monthly index of economic activity (IMAE) accumulated, from January to July 2022, showed an increase of 11.8% compared to the same period in 2021, according to information compiled by the National Institute of Statistics and Census (INEC).

In July 2022 the Imae grew only 3.36%. This is a lower variation than the 27.84% registered twelve months ago; marked by the protests of popular groups and unions of workers throughout the country, recognizes the authority but clarifies that the figures are subject to revision.

In July, freight transport in general and the movement of passengers were halted throughout the country for at least two weeks of strikes and street closures, in the face of calls for cheaper food and medicine, the curbing of acts of corruption, and requests for more job opportunities.

But, despite the cycle of street closures, according to the INEC, the economy as a whole maintains its recovery path, after the impact of the health emergency caused by covid-19 and conflicts in the international arena.

On a year-on-year basis and despite the strike that affected the country, mostly community activities, such as the provision of entertainment and recreation services, continued to favor, as did gross lottery sales.

Commercial activity, coupled with re-exports in metric tons from the Colon Free Zone, local retail and wholesale trade also experienced improvement.

Construction presented positive results due to the gradual reactivation of some private projects associated with the increase in inputs directly related to the ready-mix concrete activity.

https://www.newsroompanama.com/news/economic-activity-in-panama-up-118

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Black Weekend

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Posted 26/09/2022

The Panama Black Weekend, which from September 14 to 18, closed with sales of approximately 84 million dollars, an estimated increase of 20% compared to the figures for 2021, when sales of $70 million were generated.

Nadkyi Duque, president of the Association of Shopping Centers of Panama (Apacecom), said that there is currently a "77% recovery compared to 2019."

Among the data highlighted by the president of Apacecom, is the sale of appliances, technology, brands, sports equipment, footwear and fashion.

Sales were not only made in shopping centers since the initiative was extended to other businesses.

The administrator of the Panama Tourism Authority (ATP), Iván Eskildsen, said that for that week of discounts an inflow of 2,490 visitors was reported, from Colombia, Ecuador, Peru, Uruguay, Brazil, Argentina, Cuba, Dominican Republic, Costa Rica, El Salvador, Guatemala, and Nicaragua.
“The economic reactivation of the country continues to accelerate, which is what the National Government is betting on," Eskildsen stressed.

https://www.newsroompanama.com/news/black-weekend-sales-up-20-to-84-million-1

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Panama facing Costa Rica ‘garrote’ in trade dispute

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Posted 28/09/2022

On Wednesday, September 28,  Costa Rica Minister of Foreign Trade, Manuel Tovar, assured during an appearance before the Treasury Affairs Commission that the Panamanian government must understand the "garrote" and desist from the commercial dispute.

He was referring to his country's decision to start taxing all Panamanian products that enter Costa Rican territory that today are duty-free.

“ We are already in the last days of defining a retaliation measure that enables us through international legislation to retaliate and impose import taxes on products that arrive in the country duty-free and the case continues to the last consequences,” said the minister quoted by media outlet Teletica.

The dispute began in 2020 with the administration of President Cortizo, which applied the blockade to dairy and other products of animal origin, despite the fact that there was a free trade agreement between Panama and Costa Rica that provided tax-free income for these products.

“ The expectations are that they understand the stick, go to the WTO (World Trade Organization). We have sued them and we are willing to reach the ultimate consequences,” said Tovar, who also harshly questioned the Panamanian Head of State.

The Costa government went to the WTO in 2021 over the situation.

From Panama so far there have been no reactions to the statements.

https://www.newsroompanama.com/news/panama-facing-costa-rica-garrote-in-trade-dispute

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  • Moderator_03 changed the title to Panama's Economy, Trade, Investment Incentives, GDP, and Future Economic Growth Outlook
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13,000 jobs next year for English-speaking Panamanians

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Posted 29/09/2022

More than 13,000 jobs will be offered for the year 2023, but people will have to master the English language if they want to be one of the beneficiaries reports TVN.

There are companies requiring workers with an intermediate or advanced level of English, who are capable of holding a conversation in the language.

Solange Cortés, head of recruiting for Alorica Panama, said that many people only have a basic level of English and cannot communicate as fluently as they do in Spanish, which is important for the call center industry. He said that by 2023 they need about 3,000 people.

Alfredo Mitre,  Director of Employment of the Ministry of Labor (Mitradel), said that there are 10,000 vacancies that require English proficiency as the main skill, which will be opened during the next year.

Although he stressed that the priority is to generate opportunities for young people, women and adults since they have more difficulties entering the labor market.

Panama is preparing to meet the high demand for bilingual personnel, and Mitradel is presenting an employment accelerator plan that seeks to quickly meet this need for manpower with training in the English language.

In addition, the Ministry of Education has two plans aimed at learning the Anglo-Saxon language: " Panama After School " and "Panama Bilingüe ".

The pandemic raised the unemployment rate in the country and authorities are looking for options to boost employment, and generate work for young people who are the most affected, as well as older adults who are unable to enter formal jobs that allow them to have social security.

https://www.newsroompanama.com/business/13000-jobs-next-year-for-english-speaking-panamanians

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Panama could outlast the predicted recession coming in 2023

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Panama has a diversified economy that would help it cope with a global recession in 2023 as predicted by the World Bank and the Organization for Economic Cooperation and Development (OECD). Faced with this, Domingo Latorraca, founding partner of the firm – Eleménte, explained that in case Latin America has problems, the national territory can once again stand out as a safe port.

Domingo Latorraca, said that Panama has to be intelligent in the public investment it makes and must continue betting on infrastructure projects

According to a World Bank report, the world could be moving little by little towards a global recession in 2023 and a series of financial crises in emerging markets and developing economies. Likewise, the OECD anticipated that the energy crisis and rising prices would lead large economies to recession.

The outlook is not positive, but the characteristics that stand out of the Panamanian economy is that it is stable with a regional and dollarized banking system and these can be attractive to other countries, if trust is generated and a correct message is sent.

Domingo Latorraca stressed that Panama has an open economy that works with variables that change dramatically. An example is the flow of natural gas from the East Coast of the United States to Asia and that represents a significant volume of cargo through the Panama Canal, but that was then significantly reduced with the war in Ukraine.

“There are many variables that must be kept aware, that is why it is important that Panama has the best minds and experienced professionals to attract talent from all over the world to continue in that very dynamic game in a very complicated context, as in the last two years where it decreased by 18%,” Latorraca recalled.

But in Latorraca’s opinion, Panama has to be intelligent in the quality of public investment it makes and must continue betting on infrastructure projects.

He pointed out that the main economies of the world have a high recession, decreasing growth and a very high pressure on unemployment.

The U.S. economy decreased 0.6% compared to the same period last year, for the second time in a row, while in the first quarter it also reported a fall in Gross Domestic Product of 1.6%.

https://panamaadvisoryinternationalgroup.com/blog/news-from-panama/panama-outlast-predicted-recession-coming-2023/

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Panama expects an increase in coffee production

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During this year’s agricultural period (2022-2023), a significant increase in coffee production is expected in Panama, according to the latest projections of the Ministry of Agricultural Development.

In the province of Chiriquí alone, it is estimated that the harvest of the category could reach 110,000 quintals, an increase between 15% and 20%, compared to that of the previous agricultural cycle (2021-2022)

Grain is expected for the months of December and January.

The areas with the highest production are concentrated in the Renaissance district, where in recent years the coffee plantations have been renovated, which are already beginning to produce the grain. “

We hope that it will be the Renaissance area that will rebound in production. At this point we could have a harvest of 60,000 quintals and Boquete about 30,000 quintals,” explained Alexis Bonilla, in charge of the Mida Coffee Program in Chiriquí. “

We expect a harvest without major setbacks,” Bonilla said, while adding that “the producers have been attentive to giving the corresponding fertilizations” and as an institution they were suggested the management of the shade so that the plantations are not affected by the high cloudiness that could occur in the months, especially in October and November.

Likewise, they have been recommended the implementation of rust-resistant varieties While in the upper parts there is still betting on the production of special coffees with varieties such as Geisha, Pacamara, Catuai, Típica, with good prices on the market.

According to data from the Mida, the coffee park of Panama is approximately 21,000 hectares, of which about 12,400 thousand are Arabic and the rest are robust.

Per capita consumption of coffee in Panama is 5.9 kilograms, a high consumption compared to other countries such as Brazil where it is 5.4 kilograms, or the United States, estimated at 3.7 kilograms.

Producer Francisco Serracín said that an increase in production is also expected at the national level. In this regard, he said that of 130,000 quintals that were harvested in the period 2021-2022, for this harvest cycle production could exceed 200,000 quintals.

The province of Chiriquí is the largest producer with 6,434.99 hectares, cultivated by 1,154 producers, followed by Coclé with 4,715 hectares by 2,210 producers, West Panama with 2,300 hectares by 1,000 producers and

https://panamaadvisoryinternationalgroup.com/blog/news-from-panama/panama-expects-increase-coffee-production/

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Panama begins the export of fireworks to international markets

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It is the first container of fireworks that leaves Panama for international markets from the province of Chiriquí to Caracas, Venezuela..

Universal Lights and Effects is the company that has ventured into the export of this first container that carries 1,536 boxes of these products, made with purely Chiricana labor, mostly female.

Hernán Saldaña, administrator of the company, pointed out that the drop in sales during the years of the pandemic led him to venture into creating his own products, since acquiring them was very expensive and he had to travel to China to obtain them.

“They were very difficult months, the economic situation hit the companies, mine was no exception, the celebrations had been suspended so our products were stopped,” Saldaña said.

He added that “it is there when I think about venturing into the manufacture of pyrotechnics, with safety and quality standards, even with experts from China, where this type of artifact is created and that is when this path begins, which today not only puts this company at the forefront, but Panama as an exporter of this type of pyrotechnics.”

For her part, Meybis Vergara, a collaborator in the manufacture of these products, said she was happy to know that the work she will do will go to other countries, mainly when 90% of the workers are women, to whom a field has been opened to work on this project.

It was known that in the coming days it is planned to reach markets in Costa Rica with the shipment of one and a half containers of these devices, later to Guatemala, Aruba and other countries in the world.

Panama is approaching the high season for the sale of these products, due to the end of the year holidays.

https://panamaadvisoryinternationalgroup.com/blog/news-from-panama/panama-begins-export-fireworks-international-markets/

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In Panama, women from the Ngäbe Buglé region are being trained to install and maintain home solar systems

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The National Energy Secretariat of Panama (SNE) has announced the beginning of a training course for 25 women from the Ngäbe Buglé region, in the west of the country, to learn how to install and maintain photovoltaic systems that will provide energy to their homes and communities.

The course consists of 280 hours, with completion scheduled for next November 11. The three teaching modules include the topics Electricity and Solar energy; Installation of Solar systems; and Preventive and corrective maintenance of Solar systems.

Participants will receive kits of tools and materials necessary to install photovoltaic systems. The development of the classes will be given to the participants in Spanish and in its Ngäbere dialect.

The creation of this training of Rural Solar Installers is part of the Energy Transition Agenda 2020-2030, presented in 2020, specifically with line of action 19, “Community empowerment for the management of energy supply systems”, and with the 20, “Nexo Mujer y Energía”, part of the fifth strategic axis “Education and empowerment of the community for universal access to energy.”

The training program aims to train women in the Ngäbe Buglé region, where access to electrical energy is only around 4%.

They are looking for women in areas that do not have access to electricity, aged between 18 and 55 years, with a low level of schooling, illiteracy or semi-illiteracy, who are in a situation of poverty and who are in good health.

https://panamaadvisoryinternationalgroup.com/blog/news-from-panama/panama-women-ngabe-bugle-region-trained-install-maintain-home-solar-systems/

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Panama will simplify customs procedures through a new Portcel digital platform

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Next October, Panama will launch the first tests of the Portcel project, a digital platform to simplify port and shipping procedures to exchange information between several institutions, in a fluid and expeditious process, and that will also reduce the number of papers.

A statement from the Panama Customs Authority, the government entity that leads the project, indicated that Portcel seeks to increase the competitiveness of the country, enabling paperless digitized processes, in most cases, to improve cargo controls by the authorities responsible for exercising control in foreign trade operations, by providing the basis for the traceability of cargo, especially that in transit and transshipment operations.

To do this, training and adaptations are already being carried out for the companies that will be connected to this platform, including port terminals, shipping companies, ACP. It was announced that some have to make the adjustments to their systems to use this platform. In October, he will start a pilot plan with two shipping companies to test the system.

Customs indicated that it plans that the Portcel platform will be operational from January 1, 2023, so collaborators of the Customs Authority are already trained in a primary phase in sea cargo and later other phases such as air and land will be discussed.

https://panamaadvisoryinternationalgroup.com/blog/news-from-panama/panama-will-simplify-customs-procedures-new-portcel-digital-platform/

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