Panama expects to lead economic growth in Latin America this year, thanks to the expansion plan of its channel and a boom the property sector offset the impact of global recession .
Driven by the construction, tourism and financial services, Panama’s economy grew at a 4.39 percent annual rate in March, the government said on Friday.
Due to the low sales in the largest shopping area of the country’s free trade and a collapse in transit through the Panama Canal, it is expected that the economy lost momentum in 2009 after two years of explosive expansion.
Going from 9.2 (percent of economic expansion in 2008) to 3.0 percent is a major brake and people will resent it, “said Roberto Siphon, director of sovereign debt ratings of Standard & ratings Poor’s.
Siphon expects expansion plans of the Canal and the booming real estate sector sustain economic expansion this year.
Panama will invest 5250 million dollars to widen the canal and allow the transit of large vessels. The first contract would allocate more in June or July.
The boom in the real estate sector in recent years, partly fueled by speculation, but still remains at a lower pace.
It is hoped that a return to more rapid rates of expansion that occurs after leaving the United States recession.
“Even if only Panama is growing between 1.5 and 2.0 per cent, that is the highest rate of expansion in the region of Central America and the Caribbean, and certainly one of the fastest growing economies in Latin America,” said Franco Uccelli , an analyst at JP Morgan.