The amount of cargo passing through the Panama Canal is expected to shrink this fiscal year, the canal’s top authority said on Wednesday, with experts warning lower volumes could hurt Panama’s economy.

Canal Administrator Ricaurte Vasquez said the institution forecasts just 500 million tonnes of goods passing through the 50-mile (80-km) trans-oceanic waterway in the 2023 fiscal year, some 10.3 million less than the previous forecast.

Vasquez blamed the slowdown in part on Russia’s war in Ukraine, fears of a global recession and lower commercial activity in China.

The canal is losing out on traffic from ships that once carried fuel and gas from the U.S. to Asia, but now go to Europe and bypass the Panama Canal, Vasquez said at a conference.

“We are losing approximately two daily transits of the liquefied natural gas (LNG) vessels … We have partially compensated for this drop with higher prices,” Vasquez said.

The number of tonnes passing through the canal reached 518 million in 2022 and 516 million in 2021, according to official data.

Nicolas Vukelja, former president of Panama’s maritime chamber, told Reuters the cargo will decrease around 4% compared to the entity’s best years, which is “worrying” for the canal’s income.

“This is going to affect the economy of our country,” Edgar Urrutia, president of the Logistics Business Council, told Reuters, adding the canal’s additions to government coffers will decrease.

[reuters]