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A severe drought in Panama has led to a 36% reduction in ship crossings through the Panama Canal, one of the world’s most important trade routes. The cuts are expected to have a greater economic impact than initially estimated, with losses now estimated at between $500 million and $700 million in 2024. The drought has caused traffic congestion, raised concerns about the canal’s reliability for international shipping, and highlighted the need for new water sources for both the canal and human consumption. The canal authorities attribute the drought to the El Nino weather phenomenon and climate change.

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