QUICK TAKES

Economic Crisis? Not In Panama
Retail holds its own

By Will Irvine

The retail market in Panama is still growing in spite of the very uncertain economic climate. While it is true that the economic crisis increased the cost of living and that unemployment in Panama grew a bit, Panamanians seem not to care. The amount purchased by Panamanians went up by 12% in the period between January and September of this year as compared to the same period in 2008 according to reports from the Panamanian Chamber of Commerce, Industry and Agriculture.

According to studies conducted by Dichter & Neira, the Panamanian consumer still has enough resources to carry out its everyday purchases. It seems that the crisis in Panama is in the mind not the pockets of consumers. It is true that the actual cost of living went up as evidenced by the 0.18% increase in the Basic Food Basket in September of this year when it reached 266.85 USD versus 266.37 in September 2008. The Basic Food Basket is a social indicator used in policy making. In Panama it is a group of approximately 50 foods that are basic to the diet of Panamanians and cover their energy needs calculated at 2,350 calories.

The Basic Food Basket is generally bought at supermarkets. The main supermarket chains in Panama are Super 99, owned by current President Ricardo Martinelli, Grupo Rey and Grupo Machetazo who hold 55% of the retail market. During the first nine months of this year these three chains sold $835 million, 12.7% more than the $741 million dollars sold for the same period in 2008.

While most economies will show negative growth numbers at the close of 2009 the Panamanian economy while having faced a slowdown will show about 3% growth at the end of this year. Unemployment, according to official indicators did go up by 1% (from 5.6% to 6.6%) as compared to rest of the region where unemployment grew on average more than 2%.

At a retail level the banking industry seems to be doing fairly well as the number of deposits has increased by 11.5% in August as compared to 2008 totaling close to 21 billion dollars. When you break it down by category at sight deposits increased the most, 18.6% while savings accounts increased by 12.8% and term deposits increased by 8.9%.

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