Panama’s economy is driven by construction, logistics and transport

Panama’s economy is experiencing a positive recovery, with 92% of jobs being generated in the formal sector, according to Héctor Alexander, the Minister of Economy and Finance.

From September 2020 to April 2022, the employed population increased by 214,672 people, representing a growth rate of 13.2%.

Formal employment saw a significant rise of 196,738 people (21.6%), leading to a decrease in the unemployment rate from 18.5% in September 2020 to 9.9% in April 2022, a decline of 8.6%.

During a presentation to the Chamber of Commerce, Industries, and Agriculture of Panama, Minister Alexander highlighted that the Panamanian economy achieved a growth rate of 15.8% in 2021 and 10.8%

in 2022, surpassing global and regional economic growth. The expansion was mainly driven by trade (28.4%), construction (22.6%), and transportation and logistics (14.1%).

According to the minister, Foreign Direct Investment has played a vital role, increasing by 49.3% by the third quarter of 2022.

Alexander emphasized that Panama has successfully met all 15 actions of the Financial Action Task Force (FATF) Action Plan, aiming to be removed from the FATF’s list.

Compliance will contribute to being delisted as a high-risk third country with strategic deficiencies in anti-money laundering and counter-terrorism financing, enhancing international cooperation with the Caribbean, Europe, and other regions.

The minister also highlighted the importance of Public-Private Partnerships in infrastructure development, particularly projects such as the East and West Pan-American Highway and the fourth power transmission line, which are in the pre-feasibility and feasibility stages.

Regarding the banking sector, Alexander stated that it has remained robust despite the challenges posed by the COVID-19 pandemic, maintaining capitalization and liquidity.

In April 2023, total assets reached US$141.461 billion, representing a 4.0% increase compared to the same month the previous year.

Accumulated profits during that period amounted to US$937.8 million, showing a growth rate of 44.8%.

The minister also emphasized prudent debt management, with the debt-to-GDP ratio standing at 52.1% in March 2023, equivalent to US$45.8987 billion.