Though Panama is a small country in the middle of the Central American isthmus, it’s one of the most highly competitive nations in the region. It’s most famous for its Canal, providing an essential shipping route linking the Atlantic and Pacific oceans, which it operates as a very successful business – generating revenue of close to US$3 billion in 2021.
While the economy is small, with a population of around 4.5 million, Panama is very much open, stable, and highly diverse. This ‘Hub of the Americas’ has the U.S. dollar as recognised currency, an efficient bilingual workforce, and GDP growth of 21% (US$60.12 billion in 2021).
Panama has a stable and robust economy that has recently improved its banking regulation systems, particularly in transparency and legal/regulatory cooperation. Panama has also adopted a long-term roadmap to diversify its energy sector, with the goal being 70% of its generated energy to be from renewable sources by 2050.
While the main economy of Panama is dependent on mining (copper, gold, iron, manganese), agriculture (mainly bananas, vegetables, and sugar), transport/logistics (the Canal is the government’s chief revenue source) and timber (43% is forest land), sectors with strong future potential include tourism, infrastructure, renewable energies, banking and finance, and ports and logistics.
Panama has increasingly become more popular for foreign investment due to its stable political environment, pro-business government, rising real estate market, geographic position, and steady economic growth.