2023 Panama Outlook

Before the pandemic, Panama was growing at four times the regional average, whichelevated it into the high-income category in the region.  However, COVID pushed the country back into the middle-income category as total GDP fell more than 20% in 2020. In 2021 and 2022, economic activity recovered and brought the country back to the high-income category, but some social impacts persist.

The GDP of the Panamanian economy at the end of the third quarter of 2022, registered an 11% growth, impacted positively by the following sectors: commerce and industry, logistics, construction, transportation, and communications.

The World Bank, The Economic Commission for Latin America, and the Caribbean (Cepal), and The International Monetary Fund, estimate that the Panamanian economy will keep recovering in 2023, predicting that the country’s GDP will grow by 5%, maintaining the country at the top of the list of economic growth in Latin America and the Caribbean.

Among the activities that drive the country’s growth dynamism are the maritime and logistics complex, Panama Canal Authority, ports, railways, airports, and the infrastructure in work such as the road expansion and Metro Line 3 to West Panama.

The main challenges facing the country in 2023:

  1. Keep efforts to get out of the gray lists; mainly from the FATF (Financial Action Task Force) to attract private investment.
  2. Solve the problem of the Social Security Fund to ensure future pensions and thus prevent a social crisis that would impact the country’s economy.
  3. Obtain the legal agreement between the Government and the Canadian company, First Quantum, for the exploitation of the copper mine. This has been the largest private investment in the history of Panama ascending to $7 MM.
  4. Better management of public funds, with transparency.

The biggest long-term challenge involves reducing inequalities that especially affect women, afro-descendants, and indigenous peoples.