Panama economic activity growth hits 2-year low in March
Author: AJOT | May 27 2013 at 08:00 PM | Category: Ports & Terminals
Panama’s economic activity growth eased in March to a two-year low as traffic through the Central American country’s canal and ports dropped for the second month running, the government statistics agency said on Monday.
Economic activity expanded 5.92 percent in March, compared with the same month last year, down from 6.05 percent in February and the lowest annual growth rate since March 2011.
Fewer containers arriving at Panama’s ports and traversing the canal dragged down activity in both February and March, the agency said.
The canal, which transports about 5 percent of the world’s exports, is undergoing a $5.25 billion expansion, but delays have pushed back the scheduled opening to mid-2015, not soon enough for shipping companies seeking to save money by using bigger vessels.
Two major companies have redirected routes through the Suez Canal, a projected loss of about $40 million in government revenue this fiscal year and a 2.4 percent decline in cargo volume, according to canal administrator Jorge Quijano.
Officials from Maersk Line and Singapore’s Neptune Orient Lines (NOL) say that though it takes longer, they can nearly double their loads on bigger ships through the Suez Canal. But officials say the decline should be limited.
“We don’t see more than two services going,” Quijano told Reuters earlier this month.
The tiny nation has enjoyed double-digit growth for four of the past six years, expanding 10.7 percent in 2012. Growth dipped below 8 percent in only three months last year.
But economic growth in 2013 is so far falling short of expectations by the finance ministry and analysts, who have predicted an expansion of between 7 percent and 8.5 percent this year.
Last year’s boom was largely the result of massive public infrastructure projects, including the widening of the canal and the construction of Central America’s first metro, scheduled to open early next year.
In March, a strong expansion of Panama’s mining and construction industries was driven by public and private development and an increase in gold mining. (Reuters)