Is Panama benefiting from world economic crisis?

[Justin Roberts]

I came across a very interesting article about Panama today I wanted to share with everyone.

As everyone is aware the world economy is, well let's say in a slump. However, Panama's economy is the strongest it's ever been. In large part due to Foreign Direct Investment (FDI).

Below are some interesting facts I pulled from this article on the current economic status of Panama. To read the article in full go to: http://www.panamanewsbriefs.com/?p=50805

"Here are a few facts and figures drawn from responsible sources, both public and private, over the last month regarding the economy of Panama. This is my short list, having dropped a dozen items to keep the length within reason. In a sentence or two, they summarize a much longer report. Some are very different indicators than others, but they all are pieces of the big picture.

* Second quarter growth in Panama's GDP (the economy) measured 10.1 percent, ensuring that Panama keeps its place as one of the fastest developing economies in the world. This is also an increase from the first quarter's 8.4%, thus indicating that growth was actually accelerating in Panama, not slowing, during the first half of 2008. The latest figures through the first eight months of the year indicate an overall 9.2% rate for the year so far.

* The construction industry recorded a growth of 59.2% between January and July of 2008, compared with the same period last year.

* Panamanian exports in the first eight months of the year rose 9.9 percent over the same period in 2007.

* Foreign direct investment (FDI) in Panama in the first half of the year reached US$1.1 billion, reflecting an increase of 32.8% over the same period in 2007.

* The country's financial authorities have downgraded the potential affects to the domestic economy posed by the calamitous fiscal situation in the United States. For example, only 0.3 percent (three-tenths of one percent) of the assets at the government's development funds "could be affected by the events of the recent financial crisis in the United States."

* The Colon Free Zone (the largest in the Western Hemisphere and second-largest in the world, following Hong Kong) registered an increase of 12.1% in business for the first nine months of the year, compared to the same period of 2007. The Zone's association attributed the growth to the above-average performance of Latin American economies.

* The Panamanian port system handled 2.9 million shipping containers during the first eight months of the year, representing a 14.2 percent increase from the same period in 2007.

* As of my preparation of this commentary, the Dow Jones Industrial average is down 37% so far this year while the S&P 500 has lost 40% and the Nasdaq 41%. In the U.K., the FTSE 100 is off 40%, the French CAC 40 is down 43%, and the German DAX 47%. In Japan, the Nikkei 225 has dropped 50%. The large emerging markets have suffered huge declines, with Russian stocks down 76%, Brazil off 50% and China down 65%. What about Panama's stock market? We are down 2% this year, 4.8% off our high."

If you have any additional questions at all about Panama please don't hesitate to contact me.