Panama: Economic activity slows in August
Latest reading: Economic activity was up 1.6% in annual terms in August, following 3.1% growth in the prior month. Output declined in commerce, construction, manufacturing and agriculture, dampening the contribution of expansions in the transport, finance, hospitality, insurance, energy and entertainment sectors. The contraction in the commerce activity was mainly due to a drop in the value of re-exports of goods from the Colón Free Zone.
On a month-on-month basis, economic activity declined 0.8% in August, following a 1.1% rise in the previous month.
Outlook: Our panelists see Panama’s economy expanding in 2026 at a pace near that of 2025 and above the Central American average, with goods exports outperforming regional peers. Upside risks to GDP growth include the recently announced expansion of the free port, Panama’s recent joining of Mercosur, and the potential reopening of the Cobre Panamá copper mine. Meanwhile, trade tensions between the U.S. and China—key users of the Panama Canal—represent the main downside risk to Panama’s economy.