At the end of the fiscal year 2023, the Panama Canal Authority (ACP) produced a combined economic impact, both directly and indirectly, of $3,630 million.
Despite facing challenges such as the economic impact of the conflict between Russia and Ukraine and transit restrictions due to low levels of the Gatun Lake caused by the El Niño phenomenon, the Canal was still able to achieve these contributions.
The Canal administration noted in its 2023 report that this is a milestone achievement in terms of both direct and indirect economic contributions.
The Canal’s direct contribution to the State amounts to $2,545 million.
As per calculations by the Canal, they played a role in boosting the country’s economy by $828 million, which includes paying out $510 million in wages to employees. They also spent $318 million on buying local goods and services, as well as making payments to local suppliers for investments in equipment and infrastructure on an annual basis.
Indirect contributions to the National Treasury increased to $257 million, which was $19 million higher than the previous year.
Most of the contributions consist of the employee-employer payment to the Social Security Fund totaling $139 million, income tax amounting to $105 million, and educational insurance at $13 million.
Recently disclosed data suggests that the Canal’s direct impact on the gross domestic product (GDP) is roughly 3%, but when factoring in indirect contributions and expenses in the economy, this figure could rise to approximately 4.5% of GDP.
These figures illustrate the Canal’s significant role in driving the country’s economic growth during a period of uncertainty caused by the Government’s failure to address the drought, with Gatun and Alajuela lakes still below their ideal levels.
On September 29, the ACP requested the Cabinet Council to review and approve a resolution endorsing new boundaries for the hydrographic basin. They also asked for a bill to be presented that would eliminate restrictions on constructing reservoirs in the country.
Since there are no solutions on the horizon, it is clear that the problem has been put on hold, leaving it to the incoming administration to address and decide upon.
Currently, based on the guide curve of the Canal, Gatun Lake should be at a level of 86.98 feet above sea level under typical weather conditions. However, it is actually at a level of 80.83 feet above sea level, which is 6 feet lower than it should be at this time.
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