Gray lists and unemployment, the “dangers” facing the economy of Panama

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Panama City, Dec 23 (EFE) .- Exiting the lists of countries with deficiencies in the fight against money laundering and lowering unemployment are among the challenges that Panama’s economy will face in 2022, when it is expected to grow by 5 % and 7%, local analysts told Efe.

Panama, a country of 4.28 million people, has a service-based economy. In 2020, the pandemic collapsed gross domestic product (GDP) by 17.9%, buried domestic demand and catapulted unemployment to 18.5%.

In 2021, GDP is expected to expand between 8% and 12%, compared to 2020, thanks to the good performance of the Panama Canal and a large copper mine, activities are linked to the external sector.

But the internal economy is going at a different pace, much slower. Thousands of shops and small and medium-sized companies are still closed, the unemployment rate stood at 11.3% as of last October and informality at 47.6%.

The impact of the pandemic on public finances, with the drop in revenue, led the State to turn to the markets, which shot the debt / GDP ratio to 70% today from 46% before the health emergency.

GRAY LISTS, A “DANGER” FOR THE ECONOMY

The permanence of Panama on the lists of the Financial Action Task Force (FATF) and the European Union (EU) for deficiencies in the fight against money laundering is a “danger” for the economy, agreed the elected dean of the faculty of Economics of the state University of Panama, Rolando Gordón, and the expert economist Felipe Argote.

“The black lists do worry because that can cause foreign investment, which is already falling and will continue to fall in my opinion, less come to Panama,” said Gordón.

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Foreign direct investment (FDI) collapsed 86.4% in 2020 and 12.6% in the first half of this year, according to official data.

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