Panama Merchandise Trade Balance (USD bn)

Trade Balance in Panama

Year-on-year GDP growth likely decreased in Q4 from Q3 due to a dwindling post-Covid-19 base effect, whileand average economic activity expanded at a slower pace than in the previous quarter. Growth in tourist arrivals eased to 89.3% annually in Q4 from 108% in Q3, while ebbing global trade and the rerouting of U.S. LNG from Asia to Europe dampened Panama Canal activity—cargo volume growth slowed in Q4. Finally, growth in construction activity halved. Turning to Q1, the picture is mixed. Expansions in private consumption should have stalled: Ggrowth in oil consumption slowed, while inflation averaged higher in Q1 than in Q4. Moreover, growth in tourist arrivals softened further in January. That said, annual construction activity and cargo volume expanded at a quicker rate in January–February, boding well for investment and goods exports, respectively.