North & Central America and Caribbean

Panama
Last reviewed: 4 August 2009

Country information

See entire profile

ECONOMY

Basic Economic Facts

Nominal GDP: 18 billion US dollars (2008)
Nominal GDP per head: 5,453 US dollars (2008)
Annual growth: 9.2% (2008) GDP real growth rate
Inflation: 8.7% (2008)
Unemployment : 6.3% (as a % of labour force in 2008)
Major industries: Construction, light manufacturing, agriculture, financial services, cement, telecommunications, sugar mills and maritime services.

Export partners (2007 figures):
United States: US $388,855,880
Netherlands: US $114,639,537
China: US $68,032,101
Sweden: US $62,150,387
United Kingdom: US $61,239,025

Import partners (2007 figures):

United States: US $2,079,584,194

Curazao: US $489,155,923

Japan: US $328,944,578

Costa Rica: US $326,225,679

South Kores: US $267,671,127

Note: Import Partners of Panama take two forms, those exporting directly into Panama and those exporting to the Colon Free Zone (CLZ). The export partners mentioned are those exporting directly into Panama. Please bear in mind that as much as 11% of all imports into Panama come from the CLZ and are not broken down by country of origin.

Historically one of the most stable economies in Latin America, Panama has a well-developed services sector accounting for 80% of GDP. This is centred around the Canal, the related Colon Free Zone and the International Banking Centre. As a result average incomes are high by regional standards. However, income distribution is heavily skewed with 1 million citizens if not more (estimated at approximately 40% of the population) living at or below the poverty level, according to the UNDP. As a fully dollarised economy, heavily dependent on trade, the economy will always be vulnerable to external shocks. Fiscal deficits and growing public debt in recent years have increased this vulnerability. However, if managed correctly the Panama Canal expansion is expected to have a profound effect on the economy, with a boom predicted following an increase in oreign investment and employment in canal expansion and related projects.