While the large share of high-value services in Panama’s economy, including finance, telecommunications and logistics, is envious for emerging economies around the world, the small size of its agricultural sector arouses some concern. Despite impressive GDP growth in recent years, including regional records of over 10%, the agriculture sector grew just 6% in 2011 and 3.9% in 2012, according to figures from the National Institute of Statistics and Census (Instituto Nacional de Estadistica y Censo,…
From The Report: Panama 2014
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According to the National Institute of Statistics and Census, the agriculture sector grew 6% in 2011 and 3.9% in 2012. However, its contribution to GDP fell from 8% at the start of the millennium to 2.5% in the third quarter of 2013. One of four key pillars of economic growth in the Strategic Plan 2012-14, the sector has faced a number of challenges. The rapid pace of urbanisation, accompanied by a surge in real estate, has led to a gradual reduction of cultivated surface area and a rise in land prices. Delays in road infrastructure development have also affected profit margins. This has been further compounded by adverse climatic conditions and a rise in crop disease. Government initiatives to improve financial support for local farmers, as well as efforts to expand trade agreements with strategic markets, should bring some dynamism to the sector. Meanwhile, regulations mandating the use of biofuels should encourage new investments and add to the country’s export portfolio.