It seemed impossible due to the gloom world wide situation. But Banco General released its audited statements early this week and it confirmed the news: 58% growth in 2008 , local deposits being more than 70% of its business.
Known for being very conservative, this year they might go into ultra conservative mode. The question remains whether they´ll be able to sustain the same growth rate for 2009 under those circumstances. Pamela Cox, the Vice President of the World Bank for Latin America expressed in Costa Rica yesterday that the crisis will touch Central America as well. While no one is denying that it will reach the region (in this globalized world it would be impossible not to be reached) it is probably also true that Panama might weather the storm better than in other places.
End users and investors are still coming and buying because of a combination of factors: easy access that has made Panama become more of a business hub for the region, manageable cost of living (your health insurance if you are in your 30´s is around $100 and provides very good service with doctors who most of them studied in the States anyways), a lifestyle component (everything is close, so you can enjoy mountain, beach and rainforest in a long weekend), good internet access (optic fiber pipe runs nearby), and long term national projects like the Panama Canal expansion that will keep the country busy for at least 5 to 8 years.
For those looking at property where their value is protected, there is Casco Antiguo, Panama´s old colonial city (UNESCO World Heritage Site since 1998) and current main tourism attraction (only second to the Panama Canal). It has already one 100 room hotel under construction (the biggest size Casco Viejo will hold), and several bed & breakfasts anywhere between 3 to 15 rooms. you can get UNESCO protected historic apartments, one bedrooms and even two if you like the early bird deal for less than $300,000. The only formal existing hotel which has only 3 rooms, The Canal House, has been featured in the Travel New York Times and is getting to be known as the best hotel in Panama. It was here where Daniel Craig stayed for two months while filming his James Bond movie, The Quantum of Solace.
Commerce is thriving, as there are no commercial spaces ready to be used that are empty. The rental market for residential is also strong, as Casco Viejo is located 10 minutes from the Panama Canal Zone and from the modern city. As a friend told me the other day, is a happy middle between country and city living.
What will 2009 bring in terms of world wide economy is hard to tell. But one answer might be to stay focused, not to stretch too much and to “wait it out”. Better to do so in a country where local banks are strong and/or have had a long culture of control/restrictions and to invest in a city like Casco Viejo where you can combine lifestyle with meaningful long term investment.