About Panama: EconomyEconomy
Panama's economy is service-based, heavily weighted toward banking, commerce, and tourism, due to its key geographic location. The handover of the canal and military installations by the USA, on December 31, 1999, has given rise to new construction projects.
The strength of the Panamanian economy is evident in the business environment and good employment prospects announced recently. These developments are occurring at a time when even the expansion of the Panama Canal by US$5.2 billion dollars has not entered its peak construction. The construction of the first Metro line in Panama City by US$ 1.5 billion started in the first quarter of 2011. The construction of a copper mine by US$4.3 billion started in the second quarter of 2011. In the electricity sector is projected investments by US$4.3 billion over the next six years, according to a report released recently by the Public Services Authority (ASEP). The Panamanian Association of Hotels (APATEL) has estimated the hotel investment at US$2.3 billion dollars in the period 2010-2012. The government plans to make public investments amounting to US$13.6 billion during the period 2010-2014. Panama's economy is growing strongly, despite not yet fully enter the large investment projects.
The Panamanian economy grew 11.2% in 2007, 10.7% in 2008, 2.4% in 2009 and 6.7% in 2010%. The expectation is that Panama's economy will grow 9.5% in 2011 and double-digit in the next years. GDP (purchasing power parity) in 2010 reached $43.5 billion and, considering the population of 3.400.000, gives a GDP - per capita of US$12,700.
The Panamanian currency is the Panamanian Balboa, fixed exchange rate at parity with the United States Dollar. In practice, however, the country is dollarized; Panama mints its own coinage but uses US dollars for all its paper currency. Panama is one of three countries in the region to have dollarized their economies, with the other two being Ecuador and El Salvador.
The high level of Panamanian trade is in large part due to the Colón Free Trade Zone, the largest free trade zone in the Western Hemisphere. The zone accounts for 92 percent of Panama's exports and 65 percent of its imports, according to an analysis of figures from the Colon zone management and estimates of Panama's trade by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
Panama fared fairly well in tourism receipts and foreign direct investment as a percent of GDP (the fourth highest in Latin America in both categories).
According to the ECLAC, Panama's inflation as measured by Consumer Price Index (CPI) was 4.2% in 2007, 8.8% in 2008, 2.4% in 2009 and 3.5% in 2010.
The country’s economy is expected to keep growing and will also be helped by the installation of operations offices by 3M, Hewlett-Packard, Sinopec, Singapore Aerospace, Caterpillar, Procter & Gamble, BMW, etc.
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