IL Postcard

Panama's Economy Grows By 7.9% in First Half of 2006

Date: 09/17/2006

Just in case you've been wondering if what we tell you about Panama's economic awakening can possibly be true…I'd like to tell you what government economists here are saying.

According to official reports, Panama's gross domestic product grew 6.4% in 2005 and official forecasts for this year are between 7.5 and 8%.

It looks like the country will easily hit that mark, as the county's General Control announced Saturday that the Gross Domestic Product (GDP) increased by $247.2 million in the first half of 2006, 7.9% more than the figure achieved in a similar period last year.

President Martin Torrijos, in a Saturday interview with Reuters, said the country's economy will grow more than 6% in 2007. He predicts healthy showings from the port sector, tourism, telecommunications, and the free-trade zone.

It is widely believed that the country's future economic growth will be assured with the expansion of its canal. A referendum will be held on this issue in October. Panamanians will be asked to answer YES or NO to the question: "Do you agree with the third set of locks construction proposal?" A majority of Panamanians must vote yes in order for the project to become a reality, and so far, it seems a majority are in the "yes" category.

As we've been telling you, Panama is one of Latin America's fastest-growing economies, thanks to increased canal traffic, a booming construction sector, buoyant banking industry, and increased exports of tropical fruit.

By the way, I am not a financial expert in any way, shape, or form. But out of curiosity…and for the sake of comparison…I did a quick Internet search on GDP growth for the United States. I found that the Commerce Department says that real GDP there grew at an annualized rate of 4.2% during the first half of 2006, but is expected to grow at less than 3% for the remainder of the year. GDP growth is expected to stay near 3% in the U.S. through the first half of 2007.

Best Regards,

Brandon Clogston
International Living, Panama

P.S. The referendum on the expansion of the Panama Canal is scheduled for Sunday, October 22, 2006. This will be a monumental decision, and whatever the outcome, it will greatly affect Panama's future. International Living's Ultimate Event will be held here in Panama October 18-21, and we'll be hosting optional real estate tours afterwards, for conference attendees only. You can be sure that on the evening of October 22, we'll be watching as the votes are tallied. This will be a very exciting time to be in Panama. Maybe you'd like to join us for this historical event? Find out more here.