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Hiring Expectations Worsen in Panama

By the fourth quarter of 2020, 21% of companies in the country expect to reduce their payrolls, a proportion that is higher than the 14% registered in the third quarter of this year, a rise that is explained by the economic crisis generated by the covid-19.

Wednesday, September 9, 2020

Panamanian employers report negative hiring expectations for the October-December period. Three percent of the employers expect to increase their workforce, however, 21 percent expect to reduce it, while 68 percent remain unchanged, resulting in a Net Employment Trend of -18%.

Check out the "System for monitoring markets and economic situation in Central American countries", developed by CentralAmericaData.

Manpower's report details that hiring confidence is weakening in the four sectors that present data in quarterly comparison. The Trade sector reports a considerable decrease of 22 percentage points, while the Trends are 4 and 2 percentage points weaker in the Communications & Transport and Services sectors, respectively. On the other hand, Manufacturing remains relatively stable.

By the fourth quarter of 2020 "employers in all four sizes of business expect to reduce their workforces by the next quarter. Large companies report the weakest hiring plans with a -39% Net Employment Trend. Medium-sized companies report a negative hiring rate with a -26% Trend, while Small and Micro Business Trends are -15% and -8%, respectively," the report explains.

See full document (in Spanish).



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I was in the meeting with the ambassador last week. Actually what he was said about 4,500 US expatriates in the Chiriqui province, not Boquete. Not a big deal here, but he was trying to make a point t

I have to agree with you in principal Jim however, I came here to retire and, while doing business here is a nightmare (I have a friend who started a business in David and after 1.5 years, still does

But not all of those 4500 are border hoppers.  That makes the impact of the new regulations much less extreme than you are suggesting.

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Slow Government payment stalls construction industry


Posted 20/10/2020

In the midst of a  reopening that is moving at a snail’s pace, the construction sector is pressing the Government to pay off the debts that it has with contractors that carried out large-scale state works before the pandemic and who hope to complete them in the new reality.

José Ramón Icaza of the Panama Chamber of Commerce board of directors asked the Government to update the accounts of the state contractors, to enable construction companies to reactivate more workers with suspended contracts.

" We are aware of multiple companies that have not been able to reactivate their large projects due to the backlog of accounts, " said Icaza in an interview with TVN-2.com .

Gabriel Diez, president of the National Council of Housing Promoters, joined Icaza's call and asked the Government to make payments so that companies that were developing state projects can finish the stalled works. The sector has been reopening some of its state works since July but so far, just under 60% of the projects have been able to resume the new normal and the reactivation of only 25% of the workforce has been achieved said, Icaza.



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Panama: Economic Activity Recovers Dynamism

Due to the crisis generated by the covid-19, in May 2020 the economic activity registered its worst decline by falling 31% in year-on-year terms, however, as of June minor decreases were reported and in September the drop was 22%.

Thursday, December 17, 2020

The accumulated Monthly Index of Economic Activity (IMAE) from January to September 2020 registered a 18.3% decrease, compared to the same period in 2019, informed the General Comptroller of the Republic.

Check out the "System for monitoring markets and economic situation in Central American countries", prepared by CentralAmericaData.

According to the official figures, the sectors that were affected were: Hotels and Restaurants, Construction, Other community, social and personal service activities, Commerce, Manufacturing Industries, among others.

On a smaller scale, the following sectors were affected: Transportation, Storage and Communications, Financial Intermediation, Real Estate, Business and Rental Activities, and Electricity and Water.

According to the report released on December 16, 2020, "... some activities showed positive behavior such as: export of copper minerals and concentrates, telecommunications, generation of renewable electricity, export of fish and fish fillets (fresh, refrigerated and frozen), production of milk and its derivatives, cattle and pig farming, as well as private health services."

See full document (in Spanish).



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World Bank forecasts 5.1% Panama rebound in 2021


Posted 06/01/2021

The World Bank forecasts Panama will be among the leaders in Latin America in an economic rebound in 2021 with a growth of 5.1% in a new edition of the World Economic Outlook report in which it updated its growth projections for the world.

The Washington-based organization estimates that in 2021 the global economy will expand by 4%.

For Latin America and the Caribbean as a whole, a growth of 3.7% is calculated for the recently launched fiscal year. Like the rest of the countries in the region, Panama will go from a strong contraction in 2020 to a rebound in 2021.

The multilateral bank maintained its contraction projection for 2020 at 8.1%, a more optimistic estimate than the latest ones made by local analysts, which point to a drop in gross domestic product of around 14%.

Meanwhile, in 2021 the agency believes that the economy will return to the growth path with a rebound of 5.1%, an estimate slightly lower than the 5.3% that it had projected last October.

If this calculation is met, Panama would be among the fastest growing countries in the region.

The Economic Commission for Latin America and the Caribbean forecasts a growth of 5.5% for Panama in 2021, a performance that would only be surpassed by Peru.

Local estimates range between 4% and 7% growth, although they could be adjusted depending on the evolution of the new coronavirus pandemic.



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Tax Amnesty to Reactivate the Economy

In order to reactivate the Panamanian economy that has been damaged by the outbreak of covid-19, the Ministry of Economy and Finance will present to the National Assembly a bill to extend the tax amnesty and approve new tax relief measures.

Tuesday, February 16, 2021

The Cabinet Council, led by President Laurentino Cortizo Cohen, authorized, today, the Minister of Economy and Finance, Hector Alexander to present to the National Assembly, the bill extending the tax amnesty, as well as new tax relief measures with a view to reactivate the national economy, explains an official document.

Check out the "System for monitoring markets and the economic situation in the countries of Central America", prepared by CentralAmericaData.

From the press release of the Presidency of Panama:

February 15, 2021. In a conference room courtesy granted to the director of the General Revenue Directorate (DGI), Publio De Gracia, he sustained to the Cabinet Council, that as a result of the pandemic that the country is experiencing, it has become impossible for all taxpayers to avail themselves and take advantage of the benefits of the Amnesty and Prompt Payment Law recently expired.
In general terms, the purpose of this bill is to extend the benefits of the amnesty previously granted to allow taxpayers more time to comply with the payment of their tax obligations, thus benefiting the entire universe of taxpayers of the Republic of Panama, while seeking to increase the collection of taxes.
Regarding the Tax Amnesty, the following measures are approved:
-Extension of the term until July 31, 2021 for the payment of delinquent taxes as of December 31, 2020, with the remission of 85% of interest, surcharges and fines.
-Payment arrangements are allowed until July 31, 2021, paying 25% of the nominal tax due as of December 31, 2020, and allowing its cancellation as of December 31, 2021. Likewise, payment arrangements entered into under previous amnesty laws may be cancelled as of December 31, 2021.
-Payment arrangements made under the Prompt Payment Law, which were to be paid by April 30, 2021, are automatically extended until December 31, 2021 for outstanding payments to be made.
-A 5% discount is granted in the amount to be paid in Income Tax and Estimated Tax to those taxpayers who have a gross income of less than 2.5 million balboas with respect to their 2020 sworn return, and pay within the 4 months following the entry into force of this law.
-Extension of the term until July 31 to file certain reports and omitted returns that should have been filed by December 31, 2020, condoning 50% of the fine generated by this late filing, provided that the remaining 50% is paid before December 31, 2021 and likewise, all those taxpayers who have certain fines established in the e-tax2.0 system, may cancel 50% of such fine by December 31, 2021 and the other 50% is condoned.

Other tax relief measures:

-Considering the proposal of the Chamber of Commerce, the figure of capitalization of retained earnings in a fiscal period is reinstated, with a view to provide companies with greater liquidity and working capital.
-It is clarified in Law 3 of 1985, which regulates the preferential interest regime in certain mortgage loans, that the benefit is granted to the mortgaged property for the term of the loan and, therefore, it does not affect if there is a change of owner.
-The payment of income tax is facilitated for those taxpayers whose ordinary line of business is not the purchase and sale of real estate.
-The benefit for prompt payment of 10% of the real estate tax is extended until April 30.



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Panama: NO to Mandatory Rest Days Bill

The business sector opposes the bill that intends to stimulate the economy and local tourism, through the establishment of mandatory rest days and salary surcharges on the days of national events.

Thursday, February 18, 2021

This is Bill 487, which is called "Adopting a temporary regime of economic, cultural and national tourism stimulus, through the establishment of mandatory rest days and salary surcharges on national event days", which was presented to the Panamanian Assembly on September 28, 2020.

According to the initiative, a temporary Special Regime is established, for the Economic, Cultural and National Tourism Stimulus, which consists in the creation of the national event day.

"They will be national event days, the third Friday of the months of June, July, August, September and October of each year, in order to stimulate the economy, culture and national tourism. The days of national event will have specific denominations according to plans and programs that respond to public policies of the Tourism Authority of Panama and the Ministry of Culture" states one of the articles of the text.

According to Article 5 "... the work on the national event day for the workers of the companies described in Article 2 of this law, shall be paid with a surcharge of fifty (50%) and, as additional compensation, said rest shall be transferred to the Tuesday and Wednesday immediately following". See full text.

On February 17, 2021, the National Council of Private Enterprise (Conep) issued a statement in which it expressed its opposition to this proposal. In the document, the trade union explains that this is an unfavorable measure, since the salary surcharges would affect the productive sector, which today is in an unfavorable situation due to the crisis.

The ideal would be to receive initiatives that allow the reactivation of jobs and the generation of new jobs, rather than new charges to operating costs and expenses.

Conep proposes the temporary reestablishment of the law of bridge days (a holiday in the middle of the work week, which is moved to the following Friday or Monday).



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Labor Market: Bill Receives Endorsement

On third debate, Panama approved the legislative bill that aims at gradually reintegrating employees to their companies, which have already restarted their activities and which in 2020 suspended labor contracts due to the crisis caused by the covid-19 outbreak.

Thursday, February 25, 2021

The National Assembly approved on February 24 bill No.542, submitted by the Ministry of Labor and Labor Development (Mitradel), which allows the gradual reinstatement of workers with suspended contracts, recognizes the payment of maternity leaves to workers with suspended contracts, the return of disabled people and establishes temporary measures to preserve employment and stability of the companies, details an official statement.

The document states that "... this bill rescues and reaffirms some elements of Law No.157 of 2020, such as the regulation of the termination of the employment relationship by mutual agreement and the total cancellation of the benefits to which the worker is entitled after the suspension."

With such norm, the reinstatement of workers is regulated gradually by economic sector, as follows: primary sector will have three months; the secondary sector six months and the tertiary sector up to eight months, adds the statement.

The document concludes that "... within the novelties of the project, Mitradel creates the National Unemployment Registry, with the purpose of having statistical data that will allow the promotion of clear public policies for the promotion of employment, being the first time that this data will be available and will be made viable through the computer platform of the Digital Government."



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Panama recovery could reach 5% - IMF


Alejandro Santos

Posted 28/02/2021

The International Monetary Fund (IMF) estimates that Panama's economic recovery in 2021 could be more pronounced than the 4% it had forecast in January.

Alejandro Santos, head of the IMF mission for Panama,  told La Prensa that the impulse will come from the side of the recovery of national economic activity as a result of a gradual reopening of all sectors, and as the pandemic recedes as a result of greater availability of the Covid-19 vaccine. As health-related concerns disappear, we expect Panama's economy to continue to grow again at its potential rate of 5% by 2022 and beyond. "

"Once the crisis is over, medium-term revenues can be strengthened by improving the technical capacity of the tax authority," said the economist



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Panamanian GDP Decreased 18% in 2020

The drop in production is explained by the performance of activities that were affected by the emergence of the covid-19 pandemic in March 2020, a situation that lasted for the rest of the year.

Wednesday, March 3, 2021

The Gross Domestic Product (GDP) valued at constant 2007 prices registered, according to calculations of the National Institute of Statistics and Census (INEC), an amount of $35,308.7 million, which corresponded to a decrease of $7,724.1 million, according to an official report.

Check out the "System for monitoring markets and economic situation in Central American countries" of CentralAmericaData.

The document explains that "... of the activities that were mainly impacted were those related to personal services, construction, commerce, hotels, restaurants, business services, industry, education and financial intermediation. However, there were activities related to the domestic economy that showed positive behaviors in the period, as a result of the increase in the number of health employees to face health events, by government services. And among other activities, the cultivation of rice and corn."

The report of the Comptroller of the Republic states that "... within the behavior of the economic activities related to the external sector, the following also stood out: the Panama Canal, port activities, the agricultural sector, banana production, fishing and the exploitation of mines and quarries, and the export of copper concentrate. On the other hand, the activity developed in the Colon Free Zone and air transportation showed decreases."

The GDP for the fourth quarter showed a negative behavior of 10.9%, compared to the similar period of the previous year, according to official figures.

See full report.



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