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Panama’s lawmakers have approved a new $5.21 billion budget for the Panama Canal that is expected to boost state revenues by nearly 15%.
For the fiscal year starting in October, the canal is projected to deliver $3.19 billion to the national treasury, up 14.5% from the previous year. The canal authority also forecasts a $3.5 billion profit for the current year ending in September, though it expects fewer transits in 2026 due to global economic uncertainty.
A major feature of the budget is a $1.6 billion plan to build a new reservoir at the Rio Indio. This reservoir would provide a backup water source for the locks and could go a long way toward making the canal more drought resistant.
The need for such resilience became clear in 2023, when a prolonged drought forced the canal to limit the number of daily crossings. Each ship transit consumes millions of gallons of fresh water, and the canal’s future depends on stable supplies.
The reservoir, however, is controversial. It would displace about 2,500 residents in farming communities, and opponents have taken the case to Panama’s Supreme Court, arguing that it violates constitutional rights. Local groups say most residents do not want to leave.
The canal remains central not only to Panama’s economy but also to global trade. Its contributions are a key pillar of the national budget.
At the same time, Washington and Beijing are watching closely. The United States has pressed Panama to restrict Chinese involvement in canal operations, and former president Trump has promised to “take back” the waterway from what he describes as Chinese influence.
Sources: Reuters, Pancanal.com
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