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Significance
The situation has seen water levels drop significantly at Lakes Alhajuela and Gatun which supply water for more than half the population and the Panama Canal. Impacts on the Canal have already necessitated new draft restrictions, with potential knock-on effects for global trade, while impacts on households and agricultural producers have triggered social unrest.
Impacts
The IMF forecasts annual GDP growth of 4% through 2028, but water challenges could see fiscal pressures mount.
Continued Canal challenges will boost the prospects of overland transoceanic routes such as Mexico’s Isthmus of Tehuantepec Railway.
Increasingly regular droughts could complicate efforts to conserve Panama’s rainforest, which covers around 65% of the country’s land.
Keywords:
Transport & logistics,
Public services,
Water,
Panama,
LA/C,
economy,
industry,
politics,
social,
climate,
emergency,
environment,
foreign trade,
government,
infrastructure,
investment,
shipping,
water
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2023
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