Country Report Panama March 1998 Main report

Services: Rebound at the CFZ may be short lived

A complex of factors -- the elimination of the income tax on CFZ operators at the beginning of the year, the new container port which went into operation in the final quarter and improved security, as well as the recovery in demand in major trading partners -- brought a 15.7% rise in the value of trade through the CFZ in 1997, to $11.8bn. The growth continued through January 1998, when according to a local press report, trade totalled $949m. But the year-on-year rise in the month was only 9.1% -- a slackening which is being attributed to the Asian crisis, with the deep currency devaluations lessening that area's demand and the fallout reducing growth in Latin America, the major market for CFZ re-exports.

Trade at the Colon Free Zone ($ m) 1995 1996 1997 Imports 5,174 4,661 5,514 Re-exports 5,731 5,524 6,268 Total 10,905 10,185 11,782 Source: MIPPE.

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