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The Panama Canal Expansion's Effect on The Bottom Line in Panama

The Panama Canal Expansion’s Effect on The Bottom Line in Panama

The Panama Canal expansion project seems to be old news. Yes, the Canal is getting widened…and has been since 2007.

But what people seem to be forgetting when assessing things like Panama’s debt to GDP ratio is that the Panama Canal expansion project, due for completion in LESS THAN TWO YEARS is going to double capacity and double revenues from $1 billion dollars to $2 billion dollars.

What is going to happen when the government now has an extra 1 billion dollars to spend?  Of course, they’ll spend it!

And the current president Juan Carlos Varela has proven to be a calculated decision maker and has already shown a commitment to building new parks, new hospitals, social housing, and increasing benefits for Panama’s most needy. Social projects like these usually have major impacts on things like crime rates and education scores, meaning the investments will pay off over time.

One could argue that the overall impact of the canal on the local Panamanian economy represents nearly 30% of GDP and when you DOUBLE canal revenues overnight (as soon as the third set of locks are opened), you now have a money making machine that’s printing twice as fast.

In a country of less than 3.5 million people, an extra $1B dollars per year has a major impact.  And if President Varela decides to invest any portion of that money back in to Panama…the sky’s the limit.

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