WASHINGTON, D.C.—Panamanian President Laurentino “Nito” Cortizo said May 13 that he expects the country to experience a strong economic recovery from the Covid-19 pandemic, in line with the World Bank’s projection of 9.9 percent growth this year, after an 18 percent contraction last year.
The Covid-19 pandemic exacerbated Panama’s financial problems, with the fiscal deficit rising to 10.1 percent and public debt growing to 69.8 percent of GDP last year. To offset this, the government is implementing a 125-point plan that will boost the country’s economic recovery, Cortizo said during an online event hosted by the Woodrow Wilson International Center for Scholars. The plan focuses heavily on public works, including a $7.7 billion investment in infrastructure and a new $2.8 billion monorail in Panama City.
Cortizo said any economic recovery plan depends on a strong rollout of Covid-19 vaccines. Panama, which has approximately 4.4 million people, currently has about 9.1 million vaccine doses, of which about seven million are Pfizer and the rest are AstraZeneca, Cortizo said. The country has already administered more than 779,000 doses of Covid-19 vaccines, or 18 per 100 people, according to The New York Times.
Additional aspects of Panama’s recovery plan include bolstering small and medium-sized enterprises, focusing on infrastructure to create employment opportunities, generating resources for the financial sector and economic activities such as construction projects, as well as attracting more foreign direct investment, Cortizo said.
Migration and climate change also present challenges to the country’s economic recovery, said Cortizo. There has been a large increase in the number of migrants traveling from Colombia to Panama over the past few years, the president said. While the Panamanian government is allocating part of its budget to “comply with the human rights that we should guarantee” to migrants, including housing, food and health care needs, paying for such necessities are costly for the government, he added.
Regarding climate change, big countries “are talking a lot, but doing very little,” Cortizo said. “It worries us because we have been seeing, every year, the impact of drought on the Panama Canal,” which then affects food production and economic growth, he added. However, with the new Biden administration, Cortizo said, “we can have a world that acts on climate change.”