Ekonomske analize


Population 3.9 million
GDP 11,146 US$
Country risk assessment
Business Climate
Change country
Compare countries
You've already selected this country.
0 country odabrano
Clear all
Add a country
Add a country
Add a country
Add a country



  2013 2014 2015 (f)  2016 (f)
GDP growth (%) 6.6 6.1 5.8 6.1
Inflation (yearly average) (%) 4.0 2.6 1.0 2.0
Budget balance (% GDP)* -2.5 -4.3 -3.8 -3.7
Current account balance (% GDP) -12.2 -12.0 -9.5 -9.5
Public debt (% GDP) 41.7 45.6 47.3 47.2


(e) Estimate (f) forecast

* excluding Panama Canal Authority


  • Interoceanic canal
  • Total dollarization of the economy and financial stability
  • Colón free-trade zone, world’s 2nd-largest import-export platform
  • Regional banking and financial centre


  • Exposure to North and South American economic conditions
  • Shortcomings in infrastructure (transport, power, education, health)
  • Huge disparity between the Canal zone and the rest of the country
  • Corruption and political patronage


Infrastructure investment as the main growth driver

Panama's economic growth is the strongest in South America. The slight downturn in growth in 2015 is mainly explained by a smaller contribution from investments following completion of major works. Nonetheless, in 2016, new infrastructure projects are set to support growth: construction of a second metro line (started in October 2015), a third bridge across the Panama Canal and the renovation of the Colón free trade zone. Moreover, enlargement work on the Panama Canal, begun in 2007, is somewhat delayed. Initially scheduled for October 2014, to coincide with the Canal's 100th anniversary, it is not likely to open until April 2016. While the initial works obstructed the Canal, activity has accelerated since early 2015. Industry and agriculture suffer from a lack of investment. In order to encourage productivity in the agricultural sector, in April 2015 the government imposed import duties on 37 food products. On the services side, Panama benefits from a competitive banking sector, a veritable regional financial centre, whose assets represented 185% of GDP in 2014. Furthermore, household consumption is likely to remain strong in a context of full employment supported by the impact of investments.

Meanwhile, deflationary pressures in 2015 were maintained due to the oil price slump and also to the appreciation of the balboa (fixed exchange rate against the dollar) against the currencies of its regional trading partners. In 2016, greater stability of the balboa and more dynamic domestic demand will give some support to inflation.


Ongoing difficulties with raising tax revenue

The reduction in the budget deficit in 2015 is chiefly explained by the decline in public infrastructure spending and the cut in electricity subsidies adopted in January 2015 (0.7% of GDP in 2014). But the fall in State revenues, equivalent to 3.4% of GDP between du 2013 and 2015, limits government finances. The recent free trade agreements (Peru and the United States in 2012, Canada and the European Union in 2013) are affecting tax revenue derived from import duties. Moreover, tax receipts stagnated in 2015, which, relative to the country's fast pace of growth, reflects the weakness of tax collection. In this context, the budget balance and the public debt should stabilise in 2016 as activity accelerates.


Structurally high current account deficit set to stabilise in 2016

The trade deficit is expected to grow slightly due to the rise in imports linked to the development of domestic demand. Nonetheless, it will remain substantial; with a poorly diversified economy, Panama effectively remains dependent on imports for most of its consumer and capital goods. Apart from the free trade zone of Colón, which enjoys a trade surplus of 1.4% of GDP, the country imported goods equivalent to 16 times its exports in 2014. The negative impact of the balboa's appreciation against the currencies of its main trading partners on export competitiveness is limited because of the high import intensity and the dominant position of the United States as the country's main client and provider. The balance of services and of revenues is likely to improve, thanks to Canal toll fees, port income and associated railway income, as well as tourism income. The large current account deficit will, however, continue to be financed by foreign direct investments (10% of GDP in 2015).  


A weak parliamentary majority

With only 16 of the 71 seats in the unicameral parliament, President Juan Carlos Varela from the centre right Partido Panamañista Party (PP), in power since 1 July 2014, has had to conclude a governability pact with the 26 MPs of the centre-left Partido Revolucionario Democrático (PRD) Party. The government is committed to continuing the social policies in place since the early 1990s. Poverty is, therefore, noticeably declining, even though 22% of the population was living below the poverty threshold in 2014 (38% in 2006). The business climate continues to be constrained by red tape, especially in cases involving disputes or the resolution of insolvency procedures. Combatting corruption was one of the main themes of the PP's campaign. Four former ministers in the administration of ex-President Ricardo Martinelli, himself facing charges, are now being prosecuted for corruption, while six others are under house arrest and three former high officials are wanted by Interpol. Nevertheless, no new measures have been passed since the PP came to power. This campaign thus looks more like a political vendetta than a real desire to eradicate corruption in the country.



Last update: January 2016

  • Croatian
  • English