The trend towards slower growth in Panama continued, with the economy expanding by just 2.7%, compared to 4.4% in 1998 and 3% in 1999. As a result, per capita GDP increased by only 1.1%. Economic performance was even lower than had been expected by the authorities at the beginning of the year (3.5%-4%), and this was due to a fall in internal demand, as external demand showed a recovery after two years of decline. The slackening of both investment and consumption drove up the unemployment level. The central government deficit increased slightly owing to reduced tax receipts, but remained at a low level of just over 1% of GDP. Inflation returned to almost zero, despite the increase in international oil prices. The high current-account deficit of the balance of payments was reduced.

Related Subject(s): Economic and Social Development
Countries: Panama
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