Panama

ECONOMICS

Panama's dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism and Panama is a center for offshore banking. Panama's transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $37 billion in 2016 because of excessive government spending and public works projects. The US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011, and entered into force in October 2012.
Future growth will be bolstered by the Panama Canal expansion project that began in 2007 and was completed in 2016 at a cost of $5.3 billion - about 10-15% of current GDP. The expansion project more than doubled the Canal's capacity, enabling it to accommodate high-capacity vessels such as tankers and neopanamax vessels that are too large to traverse the existing canal. The US and China are the top users of the Canal.
Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points.

1990 2000 2010 2016
GDP (current US$) (billions) 6.43 12.3 29.44 57.82
GDP growth (annual %) 8.1 2.7 5.8 5
Inflation, GDP deflator (annual %) 0.6 -1.2 2.6 1.4
Agriculture, forestry, and fishing, value added (% of GDP) 8 6 4 2
Industry (including construction), value added (% of GDP) 19 22 19 28
Exports of goods and services (% of GDP) 57 62 70 41
Imports of goods and services (% of GDP) 64 72 78 46
Gross capital formation (% of GDP) 21 36 38 44
Revenue, excluding grants (% of GDP) .. .. .. ..
Net lending (+) / net borrowing (-) (% of GDP) .. .. .. ..
States and markets
Time required to start a business (days) .. 18 9 6
Domestic credit provided by financial sector (% of GDP) 43.5 89 80.4 80.9
Tax revenue (% of GDP) .. .. .. ..
Military expenditure (% of GDP) 1.1 0 0 0
Mobile cellular subscriptions (per 100 people) 0 13.5 182.4 127.5
Individuals using the Internet (% of population) 0 6.6 40.1 54
High-technology exports (% of manufactured exports) .. 0 1 ..
Statistical Capacity score (Overall average) .. .. 79 73
Global links
Merchandise trade (% of GDP) 29 34 94 55
Net barter terms of trade index (2000 = 100) 69 100 259 258
External debt stocks, total (DOD, current US$) (millions) 6,679 6,608 48,951 89,492
Total debt service (% of exports of goods, services and primary income) 6.2 9.5 6.2 21.8
Net migration (thousands) 2 16 28 ..
Personal remittances, received (current US$) (millions) 110 16 410 502
Foreign direct investment, net inflows (BoP, current US$) (millions) 136 828 2,549 5,995
Net official development assistance received (current US$) (millions) 99.3 17.4 127.2 22.6