Fiscal and external challenges lie ahead for Panama

Significance

Panama has demonstrated resilience and maintained economic momentum, despite challenges such as reduced traffic through the drought-stricken Panama Canal and the closure, after months of protests, of the Cobre Panama mine. Such issues will be a source of challenges for whoever wins the general election on May 5.

Impacts

• The Cobre Panama dispute may influence voters to the benefit of candidates who have positioned themselves against the mine.
• Food and utility price rises due to adverse weather could affect inflation, which the IMF currently expects to stay low, at around 2.2%.
• Unresolved US-China trade tensions could weigh on traffic through the Panama Canal in 2024.