"The plans for the Panama Canal expansion project will continue to underpin investment growth in the coming years," says Theresa Paiz-Fredel, a senior director in Fitch’s Latin America sovereign group.
Panama is investing $5.25 billion to double the capacity of the water highway, making it possible for mega-freighters to use the route. The seven-year expansion plan will ease all water transport for the fast-rising flow of Asian products to US consumers on the Atlantic coast. The canal expects to roughly double the volume of cargo that can pass through by 2020.
When asked if the canal expansion would have an impact on Panama, Peter Shaw, the senior director for Latin American banks at Fitch Ratings, says: "That’s certainly what the Panamanians are hoping for. The knock on impact of the canal expansion is certainly a strong driver to international investors."
Cate Ambrose, executive director of the Latin American Venture Capital Association, says: "With the expansion of the canal, Panama is one of the fastest growing economies in Latin America. Investor interest is enormous, and many strategic and corporate investors are targeting construction and associated industries. The liquidity of the banking and financial sectors make Panama a good market for getting deals done."