Panama: Construction Sector Forecasts Over 5% Growth

The Director of Economy of Capac, Cristina Serrano, stated that the sector faces significant challenges in financing medium-sized projects and making timely payments for incentive laws approved to ensure the interest of stakeholders in the activity. Likewise, improvement elements have been identified, such as intensive technical training programs so that the country's human capital can meet market needs. She reiterated that at the private level, it is essential for the country to generate investor confidence so that they allocate their funds to the execution of housing projects, especially with the approval of Law No. 468, which establishes a preferential interest rate regime for certain mortgage loans. The construction sector estimates growth of over 5% for the next year, based mainly on the development of the preferential interest law, sustainable infrastructure, and greater industrial activity. Serrano affirmed that Panama's integration into the Common Market of the South (Mercosur), the evaluation by risk rating agencies, and the boost of logistics, energy, and transport projects contemplated by the Executive Branch for the next year will not only benefit the economy but also the sector. 'Important work has been done in establishing a preferential interest law that gives clear rules for an incentive that does not necessarily have an expiration date, but orders parameters and incentives in different areas,' she asserted. She indicated that to the extent that the State has sufficient funds to carry out the planned works, more jobs will be generated and movement at the level of material suppliers will increase, which will contribute to increasing its contribution to the economy. The Panamanian Chamber of Construction (Capac) maintains that to guarantee this boom it is necessary to reinforce administrative digitization, modernization of the state apparatus, and strengthening of local supply chains, promoting investment and the development of new works. In turn, the president of Capac, Alejandro Ferrer Solís, expects the contribution of construction to the Gross Domestic Product (GDP) in 2026 to total 17%, a 1% difference from the current year, for which the support of public and private investment is needed. According to Ferrer Solís, the new regulation should start to yield results as of January 1, 2026, to address the current housing deficit, which is located at 150,000 housing units.