REGIONAL REPORT
Colombia . Panama ’ s convergence ratio was the highest in Latin America at twice the regional average ,” it explained .
Does this mean that Latin America is moving in the right direction ? According to the IMF , some countries are but the majority are not . However Panama , Chile , the Dominican Republic and , to a lesser extent , Uruguay , Costa Rica and Peru have moved upwards . Panama displayed the highest convergence velocity at about 8½ percentage points per decade over the last quarter of a century — 17 times faster than the regional average .
Convergence is not guaranteed , said the IMF , and the road ahead for Panama and the rest of Latin America remains long .
“ It is imperative that Panama and its regional peers increase productivity and diversify the economy in the long run , while mitigating the effects of the pandemic in the near term . This can be achieved through policies that foster innovation together with support for higher spending on education , health and infrastructure ,” commented Paola Aliperti , a research assistant in the IMF Western Hemisphere Department . n
Panama displayed the highest convergence velocity at about 8½ percentage points per decade over the last quarter of a century — 17 times faster than the regional average
Convergence
Convergence happens when the difference in incomes between richer and poorer economies narrows . The IMF has looked at the experience of Latin America , and particularly Panama , of such convergence .
“ To measure convergence , we use the ratio of the per capita GDP of Latin American countries to that of the United States ( U . S .). The average convergence ratio for Latin America in 2019 ( before the pandemic ) was around 25 per cent ( of per capita GDP in the U . S .), similar to that of Brazil or
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