Panama Lowers Economic Growth Forecast After Shutting Down Major Mine

Summary

  • In 2024, the draft budget presentation, where inflation was not included, was outlined by Alexander.
  • Meanwhile, Hernan Arboleda, an official, disclosed that the ministry was projecting a 1% to 2% economic growth in 2024, lower than the initial estimate of 5%.
  • The Panamanian government made a firm decision to terminate the operations of Cobre Panama mine, a Canadian organization under First Quantum (NASDAQ), accounting for 5% of Panama’s GDP, following a court’s ruling that the contract is unconstitutional.
  • Following this action, since October, Panamanians have been protesting against the mine, stating that the contract was overly generous.

Presentations and Projections

Alexander divulged during a 2024 draft budget presentation that the diminished number did not factor in inflation.

Hernan Arboleda, an authority, communicated that the ministry was expecting an economic progression between 1% and 2% in 2024, a decrease from an initial projection of 5%.

Controversy over the Mine

The previous week saw the government of Panama making a decisive choice to terminate the operation of the Canadian-owned Cobre Panama mine by First Quantum (NASDAQ:), which corresponds to approximately 5% of the nation’s GDP following a legal ruling declaring its contract unconstitutional.

Protest actions have been carried out by Panamanians since October, arguing that the mine received an overly wealthy deal in its contract.

The implications of these economic developments in Panama and decisions on the mining operations could have a considerable impact on the forex trading, particularly affecting the assets related to First Quantum and the Panamanian currency.

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