It is no coincidence that the International Monetary Fund (IMF) has reduced the growth prospects for Latin America and the Caribbean and that, according to the latest report of the Comptroller General of the Republic, Panama's exports have fallen by 10.8%.
Between January and May 2014, exports totalled $ 324 million, whereas in the same period of 2015 the amount was $ 289 million.
This negative trend has affected numerous products, with sharp declines in some cases, like that of coffee, which has gone from $ 3 million to $ 0.8 million, shrimp larvae, with practically no shipments, or pineapple, with the value of exports dropping from $ 15.9 million to $ 9.6 million.
During the period at hand there were also some positive figures. Such is the case of melons, with a 79.4% growth, or bananas, up 6.2%.
Given this context, economist and professor Aracelly De León considers that there is a lack of action on the Government's part. "There is little awareness that we are on the brink of a precipice," said De León. "We keep fixing the economy with small patches and there are no structured plans to prevent what is to come."
In the specific case of agricultural producers, the professor critically notes the lack of support that is given, which is reflected in the Comptroller's figures. "This is a short-term crisis," predicts De León.
Beyond its borders
Panama's figures are a reflection of what is going on overseas. According to the IMF report, "the global financial recession and the crisis in the Euro zone continue hampering the performance of the world economy."
Growth prospects for Latin America and the Caribbean will be 0.5% for 2015, the IMF reported a few days ago; a slowdown for the fifth consecutive year.
The president of the Panamanian Association of Business (APEDE), Fernando Aramburu Porras, assured that in the case of Panama the slowdown was expected, so there is no reason to panic. The strength of this economy still relies on the services sector (about 80%).
Nevertheless, this is a domino effect. Aramburu Porras clarifies that while the situation is improving in the United States, it is not doing so at the expected pace. For the IMF, this weak growth (greater than expected) at the start of the year has pushed down growth prospects in Mexico, Central America and the Caribbean, and this inevitably affects Panama, stress both interviewees.
To this we must add the decline in commodity prices, which has further weakened external relations for most countries in South America. At the same time, the international body said that some internal factors affecting these countries have added to the difficulties overseas, contributing to weakening the trust from both businesses and consumers, with the consequent reduction of private demand.
Sum of factors
Taking every point into account, it becomes clear that the region's economy should continue slowing down. And such projections are not just for 2015; the IMF also forecasts a weaker growth in 2016.
Preliminary data for the second quarter in Brazil point to a further deterioration of the economic environment, including the labour market, even though inflation remains at a disturbingly high level.
Other southern countries are also expected to grow less than anticipated earlier, as the case of Peru, Chile and Colombia. In Argentina, the economy has been predicted to remain stagnant in 2015 and 2016.
Although the situation of the Panamanian economy remains stable, Professor De León believes in the need to develop a structured action plan, both for economic and environmental aspects, since the latter has a strong impact on the country's agricultural production and, therefore, on the national economy, especially if it can take a toll on traffic through the Canal.
Source: laestrella.com.pa