UPDATE 1-Panama's growth slows to near 3-year low in February
(Adds growth comparison and background)
PANAMA CITY, April 25 (Reuters) - Panama's economy grew in February at its slowest pace in nearly three years, as a spat over the expansion of the country's canal slowed the pace of construction.
February's economic activity grew at 4.31 percent, below the 4.41 percent growth rate in January, according to official data published Friday. The figure marks the lowest growth rate in the Central American country since March 2011.
The government nonetheless estimates economic growth at 7 percent in 2014.
February's growth was stunted by less construction and mining activity following a dispute over the multi-billion expansion of the canal, and the conclusion of other large public works projects, which reduced demand for materials such as cement.
The expanded waterway connecting the Atlantic and Pacific oceans was originally due to open this year, but disagreements over the funding and delays have pushed that back.
Panama, with a population of around 3.7 million, escaped the worst of the global recession, expanding at an average rate of 8.5 percent over the past five years.
The International Monetary Fund has forecast that Panama will be the fastest-growing economy in Latin America this year.
Panama will hold a presidential election next month, with recent polls indicating a tight race between the Democratic Change ruling party's candidate, Jose Domingo Arias, and moderate leftist Democratic Revolution Party candidate Juan Navarro. (Reporting by Elida Moreno and Alexandra Alper; Writing by David Alire Garcia and Andre Grenon)
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