The skyline in Panama City, Panama

Panama Economic Forecast

Panama Economic Outlook

GDP likely rose at a robust pace in Q1. Monthly output grew 7.7% year on year on average, faster than in Q4, amid healthy construction, trade and transportation activity. Annual tourist arrivals rose over 30% yoy. That said, inflation averaged higher than in Q4, while merchandise exports declined again on an annual basis. In Q2, our panel sees GDP growth higher than Q1’s projection. Economic activity rose faster in April–May than in Q1, and yoy price growth nearly flatlined in Q2, boding well for spending. Nevertheless, the ongoing drought hit Panama Canal activity. In response, authorities restricted shipping transit by nearly 10% in July—a measure prolonged until 2024 in September, as water in the canal reached historic lows toward the end of the rainy season. As a result, a vessel queue over 40% longer than the average formed in early September.

Panama Inflation

Consumer prices rebounded in July, rising 0.6% year on year (June: -0.6% yoy) amid a smaller drop in transport prices. Inflation should intensify in the remainder of 2023, but fuel subsidies, higher interest rates and the dollarization of the economy will keep a lid on prices. El Niño hitting agricultural output and fueling food costs poses a major upside risk.

This chart displays Economic Growth (GDP, annual variation in %) for Panama from 2012 to 2021.

Panama Economic Data

2018 2019 2020 2021 2022
Population (million) 4.2 4.2 4.3 4.3 4.4
GDP (USD bn) 67.3 69.7 57.1 67.4 76.5
GDP per capita (USD) 16,180 16,526 13,341 15,542 17,411
Economic Growth (Nominal GDP, ann. var. %) 8.2 3.6 -18.1 18.1 13.5
Economic Growth (GDP, ann. var. %) 3.7 3.0 -18.0 15.3 -
Private Consumption (ann. var. %) 2.3 2.3 -14.6 9.2 -
Government Consumption (ann. var. %) 7.5 4.7 15.2 9.8 -
Fixed Investment (ann. var. %) 0.9 -0.4 -49.5 29.6 -
Exports (G&S, ann. var. %) 5.0 -0.2 -20.8 22.9 -
Imports (G&S, ann. var. %) 2.8 -1.3 -33.0 23.3 -
Industry (ann. var. %) 2.7 2.7 -31.9 36.0 -
Unemployment (% of active population, eop) 6.0 7.1 18.5 11.3 9.9
Fiscal Balance (% of GDP) -2.9 -2.9 -10.2 -6.8 -
Public Debt (% of GDP) 39.4 46.4 68.5 63.7 -
Inflation (CPI, ann. var. %, eop) 0.2 -0.1 -1.6 2.6 2.1
Inflation (CPI, ann. var. %, aop) 0.8 -0.4 -1.6 1.6 2.9
Inflation (PPI, ann. var. %, aop) - -1.1 -0.3 2.3 3.2
Current Account Balance (USD bn) -5.3 -4.0 -0.2 -2.0 -3.0
Current Account Balance (% of GDP) -7.9 -5.7 -0.3 -3.0 -3.9
Merchandise Trade Balance (USD bn) -9.2 -7.5 -2.8 -3.6 -9.3
Merchandise Exports (USD bn) 14.8 14.6 11.6 16.7 20.9
Merchandise Imports (USD bn) 24.0 22.2 14.4 20.3 30.1
Merchandise Exports (ann. var. %) 6.8 -0.7 -20.8 43.9 24.9
Merchandise Imports (ann. var. %) 7.5 -7.4 -35.1 40.8 48.7
Foreign Direct Investment (USD bn) 4.8 3.9 0.1 1.9 2.6
International Reserves (USD bn) 2.1 3.4 9.6 8.8 6.9
International Reserves (months of imports) 1.1 1.9 8.0 5.2 2.7
External Debt (USD bn) 99.4 103.9 112.5 119.3 128.4
External Debt (% of GDP) 148 149 197 177 168

Free Sample Report

Interested in Panama economic reports, analysis and data? FocusEconomics provides data, forecasts and analysis for hundreds of countries and commodities. Request your free sample report now.

Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest