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Panama’s economy will grow by as much as seven percent this year

panama-canal-cargo-shipsa

July 23rd, 2014 (ISH) Panama’s economy will grow by as much as seven percent this year, thanks in large part to revenue from its signature inter-oceanic canal, officials said on July 21.

The Central American nation’s coffers get an annual injection of about $1 billion every year from the canal, according to the Economy Ministry which said that the revenue helps buoy the local economy.

Officials said they expect growth of between 6.5 percent and seven percent for 2014.

Foreign investors also have been betting on Panama and its canal, investing $15 billion over the past five years alone, the ministry said.

The small nation – population 3.8 million – chalked up 8.4 percent growth in 2013.

Completing the widening of the waterway – a massive project which is a year behind schedule and has been mired in controversy – tops new President Juan Carlos Varela’s agenda.

The vast construction project was to have been completed this year, but delays and cost overruns have pushed back the schedule to early 2016.

The 80-kilometer-long (50-mile-long) canal was completed by United States interests in 1914 to provide a much shorter, safer route between the Atlantic and Pacific.

The IMF is forecasting an average growth of 2.5 percent for Latin America and the Caribbean this year.

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  • mhogan

    Panama goes up; Costa Rica is going down. Ya think it’s too much for Costa Rica to look at what it’s southern neighbor is doing and take a cue? Forget the benefit of the Canal; even without it, Panama’s economy surpasses that of Costa Rica — tourism is booming, foreign investment is moving in, and retirees (with money) are calling Panama home. Contrast that with Costa Rica. Next step, watch Nicaragua sink Costa Rica even further as good jobs will be created with the Canal project there (even if the project fails in the long run, the spin-off will be immense). Methinks Costa Rica politicians sit around twiddling their thumbs thinking of new ways to slap a tax on something when they should be thinking of GDP.

  • Frank Castle

    If Costa Rica could work it out to bring back the Atlantic to Pacific Railroad, it would be a hit. It wouldn’t cost a fortune either and it could be upgraded. I was fortunate enough to ride the Limon to San Jose portion that still existed in 1989 and it was an experience I will never forget. This is the kind of things tourists want to experience not criminal knifing your tires and stealing your valuables out of your car while pretending to help.
    My mom is retired near San Rafael de Heredia and that last time I visited (2012), we went to Sarchi to pick up some nice wooden items. The place was like a ghost town and I could see how many shops had already closed.
    The government needs to get it’s act together to reduce the cost of living for the Ticos (I don’t see how they make ends meet with the prices I see there at the supermarket…it’s cheaper in the USA by far) and of course the tourists or they will go elsewhere.
    Example, in Panama, you park your car, lock up your valuables and things a relatively safe. You don’t need a kid or guy to pay to watch your car either. Heck, my wife is Filipina and they don’t do that there either. I never saw this in Panama, either.
    Costa Rica and Ticos are fine people but they need to figure out what their priorities are or things will only get worse.