In recent years, Panama’s economy has demonstrated remarkable resilience, bouncing back from the adverse effects of the COVID-19 pandemic. The country’s GDP in 2022 reached US$76,522.5 million at current prices, reflecting a 13.5% increase compared to the previous year. Adjusting for inflation, the real GDP growth rate was 10.8%, surpassing the 2019 levels. This impressive performance can be attributed to the positive trends in both external and internal sectors.
Panama’s external sector growth was primarily driven by the Panama Canal, port services, air transportation, and the Colon Free Zone. These sectors have successfully capitalized on the global economic recovery and boosted the nation’s overall economic performance.
The internal sector also experienced growth across various industries, including construction, commerce, manufacturing, electricity, real estate, business services, arts, entertainment, and other personal services. Commercial activities registered a notable 16.3% growth rate. The gross value added in agriculture, livestock, forestry, fishing, and related services increased by 5.2%, while education experienced a 2% decline due to students shifting towards public schools. Financial activities saw a 5.5% increase, despite a decrease in insurance companies’ performance.
Since September 2022, Panama’s tourism industry has made a remarkable comeback, surpassing 2019 levels in visitor volume. The 2022 recovery rate was 83% compared to 2019, with leisure tourism leading the way. Business and group tourism have been slower to recover, but steady progress is being made. Nine priority markets, including the United States, Colombia, Brazil, and Argentina, accounted for 53% of international air tourists in 2022.
Panama’s unemployment rate dropped from 11.3% in 2021 to 9.9% in 2022. However, this data is only available up until April 2022, and more recent figures are required to determine the current unemployment rate. Job creation has been slow, and both the unemployment and informal employment rates show a long-term upward trend.
Inflation in 2023, as per the National Institute of Statistics and Census (INEC), saw a year-on-year variation of 2.0% in February. This increase was primarily due to rising prices in education, alcoholic beverages and tobacco, housing, water, electricity, and gas, as well as clothing, footwear, and recreation and culture.
The preliminary total balance of the Non-Financial Public Sector (NFPS) showed a deficit of US$3,005.5 million in December 2022, representing 3.93% of the estimated GDP. This deficit is within the limits established by the Fiscal Responsibility Law (4.0% as per Law No. 185 of November 25, 2020). Panama’s fiscal deficit was managed through a financing mechanism called a swap and a change in the GDP base year, which increased its value at current prices. Panama’s economic resurgence is a testament to the country’s ability to adapt and overcome challenges. The GDP growth in 2023, driven by the robust performance of both external and internal sectors, indicates a bright future for the nation. However, to maintain this momentum, Panama must continue to address issues such as unemployment, inflation, and fiscal responsibility.