Consumption and retail were in boon despite the global economic downturn

Collection of taxes on sales (ITBMS), which is a tax on consumption, grew substantially from January to October of 2009, according to information published by Ministry of Economy and Finance on its website. This shows that the consumption was booming in 2009, spite the global economic downturn.

From January to November of 2009, consumption of residential electricity and gasoline sales grew by 12.8% and 16.6% respectively, according to information published by General Controller, which shows that consumption has been boom. However, new car sales fell by 27.7% from January to November, due to credit restrictions by banks.


Source: based on information from Ministry of Economy and Finance.

Supply credit for consumption has contracted, the which, together other credit restrictions, have been putting pressure to consumption boom. New loans for consumption fell by 23.1% from January to October, according to information published by Superintendent of Banks on its website. Most consumer loans affected were credit cards and credit for car purchases. Panama Economy Insight expects consumption grow just 2.6% in 2010 due to these credit restrictions and lower economic growth and employment; however, expects consumption grow by 9.6% and 8.7% in 2011 2012 as a result of Canal of Panama and recovery real estate market.