business & economy

Is it a good Christmas retail season or not?

Although any informed observer of the Panamanian economy knows that accurate statistics are hard to come by, it's generally agreed that compared to this time last year the economy has grown and unemployment is down, but inflation is up. (Officially, the Gross Domestic Product is up 6.1 percent, unemployment has dipped into single digits for the first time in decades and inflation is at 3 percent.) So what should all of that indicate about Christmas shopping season, which is the mainstay of many retail businesses?

In an overall sense, one would expect that it would boost business. However, there are other dynamics in play for the individual enterprise. The growing new Multiplaza shopping center at the site of the old Paitilla airport is drawing a lot of Christmas shoppers who in previous years went elsewhere, and to a far lesser extent, so is the nearby Colombian-owned and largely Colombian-oriented Multicentro on Avenida Balboa. The Albrook Mall is also growing, and attracting shoppers who are mostly lower down on the economic scale than those who patronize establishments in the Paitilla area. But that growth has in part been balanced by an apparent decline in older shopping areas like the stores along Via España in the banking district and on the Avenida Central pedestrian mall. We're seeing early pre-Christmas sales in a number of establishments in those areas, and that's often a sign of troubled times for the merchants involved.

We will get some anecdotal evidence of how things went soon after the holiday season has run its course, and the best evidence will probably be found in the form of sales tax receipts by the government. However, in this country most economists believe that the official unemployment figures are always several percentage points too low and that growth and inflation indexes also aren't as accurate as they could be. More esoteric but nevertheless important numbers like a consumer confidence index and an accurate measure of pre-Christmas retail volume that are closely monitored in North America and Western Europe are not available in any meaningful sense in Panama. The paucity of good economic data translates, among other things, into a lack of tools for valid market research and thus reinforces the common tendency among Panama's business elites to make decisions on instinct or wishful thinking rather than on the basis of diligent homework. Photo by Eric Jackson