News
Tuesday 25th June 2024.
June 24, 2024
An analysis by JP Morgan, written for global investors, puts Panama in a better position regarding the possible loss of investment grade by rating agencies Moody’s and Standard & Poor’s, after Fitch degrades the country. The economic growth forecast also improved.
The report warns that Panama has faced several challenges since the covid-19 crisis, which had raised concerns about the possibility of losing its investment grade in the next 12 months.
However, there are encouraging signs suggesting that this downgrade could take longer than expected and be less likely than initially feared.
“Positive news is beginning to emerge and we now think that the timing of a possible downgrade could be longer and the probability of it occurring lower,” JP Morgan expressly indicates.
One of the most positive news is the improvement in weather conditions in the country.
After one of the worst droughts recorded in the second half of 2023, the Gatún and Alajuela reservoirs had fallen to very low levels, significantly affecting vessel transit through the Panama Canal.
But with the water level rising, the Panama Canal Authority (ACP) has begun to eliminate daily traffic restrictions, increasing passages from 22 to 32 per day. It will increase to 33 transits from next July 1.
Although full capacity has not yet been reached, this is a notable improvement. The average daily transits should be between 36 and 38 to reach optimal levels.
In addition to the good news related to the Canal, economic activity in the first four months of the year has been better than expected, especially considering that this period is the most challenging before the general elections.
“The data suggests that the business sector was greatly affected by uncertainty (construction spending plummeted), but consumption appears to have held up much better,” the report noted.
In this context, JP Morgan has revised its forecast for the growth of Panama’s gross domestic product (GDP) for this year, raising it from 0.5% to 3.5% year-on-year.
During the first quarter, the Panamanian economy showed a significant slowdown. It grew 1.7%, compared to 9.3% during the first three months of 2023. Still, JP Morgan’s reading is positive compared to original estimates.
The Panama Canal is exposed to extreme situations with climatic phenomena that generate very prolonged droughts and even floods in some seasons, in addition to the fact that population growth and water consumption have exceeded expectations and the capacity of the lakes that supply the resource. water. This was warned by Salvatore Basile, vice president of Corporate Affairs of the Panama Canal Authority (ACP), during the monthly meeting of the Panamanian Association of Business Executives (Apede) whose theme was “The Water Challenge.”
“For the Panama Canal it is important that before the end of this calendar year we can give news to the world that we have made a concrete decision that will lead to the problem being solved in the medium and long term.”
Basile stressed that the drought in the last year led the Canal to make the decision to reduce the number of transits, at the same time, The population’s water consumption due to demographic growth also represents pressure on the resource, since the two lakes Gatún and Alajuela are no longer sufficient, much less when they are exposed to droughts such as the one experienced between 2023 and part of 2024.
“We are cautiously watching the increase in rainfall. Even though the rains have returned, we remain cautious and it is important that the sense of urgency is not lost. We must give a message to the world that the Panamanian has a solution and, therefore, demonstrate that the sustainability of the Canal will be guaranteed,” Basile reiterated.
Basile said that the decision whether or not to build a reservoir on the Indian River is now in the hands of the new administration, because the outgoing Government indicated that it had not found the political moment to adopt a solution.
The president of the Panamanian Association of Business Executives (Apede), Juan Carlos Arosemena, warned that the image of the country and the Canal has been damaged worldwide due to the lack of actions that can guarantee a solution to the water crisis.
Arosemena asked the incoming administration to take the issue of the Canal as an urgent task and publicize the measure that will not only guarantee water for the interoceanic waterway through which between 5% and 6% of world trade passes, but also the water resource. for the consumption of the population.
Another important step was taken this Monday on the path to July 1, the day on which the 2024-2029 government period begins. The Electoral Tribunal (TE) delivered the credentials to the country’s elected mayors and their vice mayors.
The event was attended by the majority of the country’s municipal authorities, and the three TE magistrates. Panama has 81 districts.
There were no big speeches at the event. The mayors and vice mayors were called one by one and if they were in the room they passed in front of the main table and then one of the magistrates gave them the credential. The first on the list were those from the province of Bocas del Toro.
The elected mayors of Panama, Mayer Mizrachi, and David, Chiriquí, and Joaquín De León did not attend.
Through the X account of the office of the president-elect, José Raúl Mulino , two new appointments were announced seven days before the new administration is installed.
Jorge M. Correa was appointed deputy administrator of the Panama Tourism Authority (ATP) , while Ventura Vega Batista will take the role of executive secretary of the Gaming Control Board (JCJ).
Correa has a degree in Marketing with an emphasis in Sales. He has a master’s degree in Business Management and Marketing, according to the release.
Between 2010 and 2011, in the administration of Ricardo Martinelli, he was commercial director at the Tocumen International Airport. Also, he was Sales Director of Radisson Decapolis & Decameron Hotels between 2004 and 2008.
For his part, Vega is an industrial engineer who graduated from the Santa María la Antigua University (Usma).
The president-elect, José Raúl Mulino, nominated Luis Enrique Bandera as Superintendent of Insurance and Reinsurance of Panama.
Bandera has extensive experience in the insurance business in Panama. He has served as general insurance director of Banco General (from 2021 to present), General CEO of Seguros (1998-2021), commercial director of Munich Re-México (1989-1998), technical manager of Metropolitana de Seguros.
He has also actively participated in business associations as president of the Panamanian Association of Insurance Companies, treasurer of the National Council of Private Enterprise (Conep), and president of the Inter-American Federation of Insurance Companies, among other positions.
Bandera’s nomination must be ratified by the Credentials Commission and then by the Plenary Session of the National Assembly.
More than three tons of drugs have been seized by the authorities this month in operations carried out in the provinces of Colón, Panama, Panamá Oeste and Coclé.
One of the first seizures made by the authorities was recorded on June 17, when 780 kilos of cocaine were located inside a container in a port in the province of Colón. The drugs were located inside a double bottom in a container from Ecuador. In this case, no people have been arrested.
The second seizure was recorded on June 19, when officials from the National Aeronaval Service (Senan) seized a shipment of 1,329 kilos of cocaine that was transported in a speedboat near the Guna Yala archipelago. In the operation, six people who were transporting the drugs were arrested. The case was placed in the hands of the Colón and Guna Yala Drug Prosecutor’s Office for the investigation process.
On June 21, police officials and the Drug Prosecutor’s Office seized 885 kilos of cocaine, which were hidden in two containers. The first container, coming from Chile, had Belgium as its final destination. There were 285 packages of alleged illicit substances located there, authorities reported. In the second container, coming from El Salvador bound for Belgium, 600 more packages of suspected drugs were found.
Meanwhile, a shipment of 200 kilos of cocaine was seized by the police in Antón, Coclé province. The drugs were hidden inside a vehicle.
In this case, the authorities estimate that the drug was introduced along the coasts of Río Hato or Antón and that it would be transported to the border with Costa Rica.
Meanwhile, last Saturday night, 998 kilos of cocaine were located hidden inside a residence in the Colinas del Sol neighborhood, in the town of Burunga, province of Panamá Oeste. At the time of the raid carried out by the authorities, the residence was unoccupied.
According to statistical figures, during the first six months of this year the authorities have seized some 53 tons of drugs in operations carried out throughout the country. In all of 2023, 119.2 tons were seized, the vast majority of which was cocaine, according to the Ministry of Public Security.
Also, according to police figures, during this year a total of 1,636 people have been arrested for micro-trafficking and 27,211 doses of illicit substances have been seized.