Panama Canal Makes Immense Contribution To Country’s Economy

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The Panama Canal Authority (ACP) generated direct and indirect economic contributions that totaled $3,630 million at the close of the 2O23 fiscal year, ACP said in a media release.

Record Achievement

These contributions were achieved, by Canal, despite the challenges that the maritime route faced including the economic impact of the geopolitical situation and transit restrictions due to low levels of the Gatun Lake, caused by the El Niño phenomenon. This is a record achievement in direct and indirect economic contributions, the Canal administration stated in its 2023 report.

The contributions include the $2,545 million that the Canal delivers to the State as part of its direct contribution. According to the Canal’s measurements, they indirectly contributed $828 million to the country’s economy, resulting from the payment of $510 million in net salaries to collaborators. In addition to $318 million in local purchases of goods and services, and payments to local suppliers as part of the investments in equipment and infrastructure that the ACP makes annually.

Economic Importance

Indirect contributions to the National Treasury reached $257 million, $19 million more than in 2022. These contributions are mainly made up of the payment of the employee-employer contribution to the Social Security Fund for $139 million, income tax for $105 million, and educational insurance for $13 million.

According to recently revealed data, it is estimated that the Canal’s direct contribution represents approximately 3% of the gross domestic product (GDP), while if indirect contributions and expenses in the economy are included, these contributions would reach around 4.5%. of GDP. These numbers reflect the economic importance of the Canal as an engine for the country’s development, in times of high uncertainty due to the Government’s inaction to confront the drought, while Gatún and Alajuela lakes remain below their optimal levels.

On September 29, the ACP asked the Cabinet Council to consider the approval of the resolution that endorses new limits of the hydrographic basin and also requested the presentation of a bill that would allow lifting restrictions on building reservoirs in the country. With no answers in sight, it is understood that the issue has been archived, so it will be up to the next administration to make decisions.

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Source: PortNews