Panama’s Growth Prospects: Determinants and Sectoral Perspectives
IMF Working Papers, July 7, 2017
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- Panama’s Growth Prospects: Determinants and Sectoral Perspectives
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Bibliographic details
- Authors: Kimberly Beaton, Metodij Hadzi-Vaskov
- Published: July 7, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484307861.001
Summary and framework
- The paper estimates medium-term potential growth for Panama amid significant structural and secular changes.
- A forward-looking framework is used, incorporating three analytical approaches to examine economic prospects; this complements backward-looking methods that filter or extrapolate historical data.
- The opening of the expanded Panama Canal in 2016 is highlighted as a key structural change affecting the Panamanian economy.
Major findings on growth determinants
- Panama is well-placed to maintain its business model.
- Improvements in education and governance are important to support growth.
- The current pipeline of investment projects can help sustain investment-led growth, although at a more moderate pace.
Sectoral perspectives and opportunities
- Logistics: Further development of the logistics sector holds promise to build on Panama’s comparative advantage.
- Tourism: Further development of the tourism sector is identified as a promising area to reinforce comparative advantage.
- Transportation and infrastructure: The expanded Panama Canal (opened in 2016) and ongoing investment projects are central to the country’s evolving infrastructure base.
Policy implications and recommendations
- Strengthen education to support medium-term potential growth.
- Improve governance to sustain and enhance the existing business model.
- Prioritize the execution and management of the pipeline of investment projects to maintain investment-led growth, recognizing that growth may proceed at a more moderate pace.
- Support targeted development of logistics and tourism to capitalize on comparative advantages.
Methodology and scope
- Uses a forward-looking framework with three analytical approaches (not specified in detail on this page) to estimate potential growth.
- Emphasizes complementarity with backward-looking filtering and extrapolation methods.
Source: IMF Working Paper by Kimberly Beaton and Metodij Hadzi-Vaskov, July 7, 2017.
Content in this bundle
- Panama’s Growth Prospects: Determinants and Sectoral Perspectives, WP/17/150, July 2017