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PANAMA CITY, Oct 24 (Reuters) - Panama’s economy picked up steam in August, but slowing work on the expansion of the country’s canal and an end to some public works projects continued to drag on the pace of growth.
Panama’s economy grew by 5.54 percent in August compared to the same period a year earlier, the national statistics office said on Friday. That was above the 5.2 percent pace reached in July and the second highest reading this year.
Still, the figure was well below the 8.5 percent average annual growth rate reached over the last decade.
The government expects the economy to expand by about 7 percent this year, but in the first eight months of 2014, the economy grew by only 4.61 percent, compared to the same period last year, official data shows.
Construction and mining activity increased, but they remain subdued as work on the multibillion-dollar expansion of the Panama Canal slowed as the project nears completion.
The conclusion of other state-funded projects like the capital city’s first metro line has also reduced demand for building materials such as cement.
The expanded waterway, which connects the Atlantic and Pacific Oceans, was originally due to open this year, but disputes over funding and delays have pushed that back to 2016. (Reporting by Eli Moreno; editing by Andrew Hay)