Panama economy in first quarter grows at slowest pace since 2009

MEXICO CITY, June 27 Fri Jun 27, 2014 9:11pm EDT

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MEXICO CITY, June 27 (Reuters) - Panama's economy grew at its slowest pace in more than four years in the first quarter, the government said on Friday, as work delays at an expansion of the Panama canal and the end of other public work projects weighed.

Panama's economy grew 5.8 percent during the first quarter compared to the same period last year, when the economy grew 7.6 percent, the government said in a statement. The economy grew at an 11.4 percent annual rate in the fourth quarter.

The first quarter's growth was the slowest rate recorded since 2009, when the economy grew at a 4 percent annual rate in the aftermath of the global credit crisis.

Economy Minister Frank De Lima told reporters that the economy was weaker than expected but that the government was sticking to a projections for 7 percent annual growth in 2014.

A multibillion-dollar expansion of the Panama Canal was originally set to be finished this year, but completion has been delayed after a spat between contractors and the canal authority early this year.

The conclusion of other public works projects, such as a subway, also cut into demand for building materials.

Commerce through Panama's free trade zone was also hit by a dispute between Venezuela and Colombia that has reduced trade between the two South American countries.

Economic growth has been slowing in Panama after $15 billion of infrastructure projects helped lift growth to one of the fastest rates in Latin America in recent years.

The economy grew at a rate of 8.3 percent last year, downwardly revised from an 8.4 percent rate, the government said in a statement, after expanding 10.2 percent in 2012. (Reporting by Elida Moreno; Editing by Bernard Orr)

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