Wednesday, February 8, 2023

Panama’s labor market has been left with scars from the pandemic

The labor market in Panama, marked by unemployment and informality, was left with “scars” due to the economic consequences of the covid-19 pandemic, experts concluded this Thursday in a forum.

Despite the fact that the economy “suffered like most of the countries in the region, (because) there was a great shock due to the pandemic, the good news is that it has recovered, however the labor market has been left with scars,” he said. the specialist in labor markets of the Inter-American Development Bank (IDB), María Teresa Silva.

“The unemployment rate remains above pre-crisis levels and for this year and next the International Monetary Fund (IMF) expects it to remain above 10%,” Silva explained during his speech at the ” Economic Forum 2023, Hablando Claro. The Future of Our Economy”, held this Thursday in Panama City.

To this “new challenge are added other structural ones such as high labor informality” that “reaches around 50% of workers (and) in the last 10 years has been increasing,” he added.

Panama continues to “lead” the economic growth of the region, according to the Government based on the forecasts of international organizations that place the expansion of the Gross Domestic Product (GDP) between 6.2% and 7.5%.

The Panamanian GDP registered at the end of the third quarter of 2022, a growth of 11%, driven by sectors such as commerce, construction, transport and communications.

The unemployment rate is 9.9% and informality is 48.2%, according to official figures from last year.

Silva explained that there is “a relationship in terms of higher GDP per capita, there is less labor informality,” although “although this is necessary, it is not enough,” and Panama “has a higher level of labor informality than other countries such as Costa Rica, Chile or Uruguay that have a lower GDP”.

For this reason, the expert proposed some policies to help the Panamanian labor market, such as improving the skills of the labor force, investing in active market policies, and rethinking unemployment insurance.

Almost a dozen experts participated in the forum, organized by the National Council for Private Enterprise (Conep), where they analyzed the Panamanian economy with the aim of revitalizing it and improving the labor market, one of the most deteriorated areas.

“Panama is a country that has multiple opportunities (…) We have to promote those opportunities, put education at the center and do a job in Justice,” the president of the National Council of Private Enterprise (Conep), Rubén, told EFE. Castle.

The forum was divided into three blocks: realities and threats, growth prospects in strategic sectors and key strategies to boost the economy.

“We have many challenges (because) we come from a very complex situation marked by the pandemic, the effects of the war,” Castillo concluded.

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