CORRECTED-UPDATE 2-Panama posts 2nd straight year of double-digit growth in 2012

Fri Mar 1, 2013 5:20pm EST
 
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(Corrects Copa revenue rise in 10th paragraph)

* Panama economy grows 10.7 percent in 2012

* Infrastructure spending drives growth

By Lomi Kriel

PANAMA CITY, March 1 (Reuters) - Panama's economy notched its second consecutive year of double-digit growth in 2012, driven by a $5.25 billion expansion of its canal and the development of Central America's first subway, though a slowdown is expected in 2013.

Panamanian growth reached 10.7 percent in 2012, the government statistics agency reported on Friday, compared with 10.8 percent in 2011. Growth in the fourth quarter cooled slightly to a 10 percent annual expansion rate, from 10.5 percent in the third quarter.

"We're very pleased with the economic performance in 2012 and that we are leading economic growth in Latin America despite all the turmoil the global economy is experiencing today," Finance Minister Frank De Lima told Reuters. "Our perspective for Panama in the medium and long term is very positive."

The Finance Ministry expects growth to decelerate to about 8.5 percent this year, although analysts say it is more likely to come in between 7 and 8 percent, given the strong boost to growth last year from the canal and metro construction.

The tiny Central American country's economy has largely evaded the global recession, expanding at double-digit rates for four of the past six years.   Continued...