Panama’s dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of its GDP. Services include the operation of the Panama Canal, logistics, container ports, flagship registry, the Colon Free Trade Zone, banking, and tourism. From 2006-2012 the GDP has averaged 8%, and the GDP reached 10.7% in 2012. Panama has also had the lowest inflation rate in Latin America over the last 20 years. The many infrastructure and public and private construction projects have been a major factor in creating jobs, with the unemployment rate reduced to only 4.4%.  

Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and is estimated to be completed by 2015 at a cost of $5.3 billion. This expansion is expected to more than double the Canal’s capacity, enabling it to accommodate ships that are too large to transit the existing canal. 

Panama’s booming transportation and logistics services sectors, along with aggressive infrastructure development projects have been a major factor in economic growth. Panama is constructing the first subway system in Central America at a cost of $1.2 billion, as well as many street and highway improvements throughout the country. A new $269 million metro bus system has also been implemented. 

One of the major highway construction projects includes the extension of the Cinta Costera highway, which runs parallel to the Pacific coastline in Panama City that will help reduce commute time in one of the city’s most congested areas. Other projects include the 15 km extension of the Panama-Colon highway and the 10 km extension of the North Corridor Highway which will provide another major access to Tocumen International Airport. Infrastructure is far ahead of the rest of Central America.

Several major construction projects are underway. Tocumen International Airport is expanding by 30%. Several regional airports are being expanded to international status. A large state-of-the-art Convention and Exhibition Center on the Amador Causeway will replace the outdated Atlapa Convention Center. Five new hospitals are being built in strategic locations across the country. Sanitation of the bay is a new important $538 million project.

The Colon Free Trade Zone, one of the pillars of the Panamanian economy, is the second largest free trade zone in the world after Hong Kong. Established in 1948, the Free Trade Zone is a commercial showcase par excellence for the whole continent. Imports and Exports registered in the Colon Free Trade Zone surpass 5 billion dollars annually, directed towards a market of more than 525 million consumers.

Panama is the banking center of Latin America, with over 90 banks represented from 35 different countries. Bank loans are widely available to foreigners in Panama, with interest rates comparable to the U.S. In order to open a bank account in Panama you will have to present a certain amount of current documentation. These requirements may vary from bank to bank, but the basics are generally the same and you may feel that you are being asked for more information than you would have to provide in other parts of the world.

Tourism has become a significant factor in the economy. Over 2 million visitors now come to Panama every year.  Direct flights from L.A., Newark, Atlanta, Houston, Miami, Chicago, Las Vegas, Washington, D.C., Dallas, New York City, Newark, Orlando, Ft. Lauderdale, Toronto, and numerous international cities connect to Panama. It is only a 2.5 hour plane ride from Miami. Panama received the highest rating for tourist safety from the prestigious Pinkerton Agency (same rating as U.S.).

Seventy-seven million baby boomers are retiring over the next ten years with 4% expected to retire in Latin America! Panama has been the number one retirement destination in the world six years in a row, in part because it has arguably the best retirement program in the world. Panama has world-class medical facilities – at prices far less than the U.S. Numerous programs exist to assist foreigners in obtaining permanent residency in Panama quickly and easily (in as little as 4 months). Additional factors that make Panama desirable to visit and to live are clean, drinkable water throughout the county, and a stable democracy with strong political ties to the U.S