ECLAC: Panama Canal Economy Still the Engine as Growth Seen at 4.4%

Panama · ECONOMY

The waterway is carrying growth again, and ECLAC likes the numbers — but not the concentration of risk.

Panama’s economy will grow 4.4% in 2026 and 4.6% in 2027, roughly double the Latin American average, and the Panama Canal economy is doing the heavy lifting. That is the conclusion of the UN Economic Commission for Latin America and the Caribbean (ECLAC), whose economists presented an updated outlook to La Estrella de Panamá this week. Their message cuts both ways: the rerouting windfall that is filling the waterway is real, and so is the risk of building a country’s growth on a single asset.

What ECLAC projects for Panama

ECLAC’s updated outlook for 2026 and 2027 places Panama once again among the most dynamic economies in the region. The commission expects growth of 4.4% this year and 4.6% next, while Latin America and the Caribbean as a whole expand by only about 2.2% and Central America averages around 4%. Ramón Padilla, ECLAC’s research coordinator in Mexico, and José Manuel Arroyo, who led the commission’s note on Panama, told La Estrella de Panamá that the country keeps confirming a historical pattern: sustained growth above the regional mean, built on its role as a logistics and financial hub.

The forecast is more conservative than the Panamanian government’s own. Economy and Finance Minister Felipe Chapman has projected 4.9% growth for 2026, while the 2027 budget is built on a 4.0% assumption. ECLAC’s 4.4% sits between those two numbers, and both institutions agree on the direction: Panama outgrows its neighbors because the Panama Canal economy pulls the rest of the country behind it. Canal Authority figures underline the point — transits rose 5.2% to 10,726 in the first nine months of fiscal 2026, while cargo volume climbed 7.2% to 389.96 million PC/UMS tons and transit revenue reached US$4.802 billion.

Why the canal is carrying the economy

Arroyo was unusually direct about what drives the numbers. ‘It is definitively the Panama Canal that is carrying the pace of the country’s economic growth,’ he said, pointing to the multiplier effect that transit demand has on auxiliary services and connected activities. The rerouting of commercial and energy routes caused by the Middle East conflict has raised demand for transits through the interoceanic waterway, and that demand spills over into logistics, wholesale and retail trade, the free zones, tourism — visible in hotels and restaurants — and financial intermediation.

In other words, the Panama Canal economy is not just tolls. Each additional ship that crosses feeds trucking, warehousing, bunkering, insurance and banking, and that ecosystem is why Panama’s growth rate can double the regional average even in a weak year for world trade. ECLAC notes that the country also alternates with Costa Rica as the region’s top destination for foreign direct investment, drawn by macroeconomic stability and logistics appeal, with capital flowing into real estate and private infrastructure.

The risks ECLAC sees in that dependence

The commission’s warning is as important as its forecast. Leaning on so few sectors exposes Panama to shocks it cannot control. First, droughts tied to El Niño can restrict the number of transits and hit canal revenue directly — the waterway has already had to cap daily transits and tighten draft limits when rainfall falls short. Second, an eventual resolution of the Middle East conflict would unwind the rerouting premium that is currently inflating demand for the canal and for the logistics services around it.

Third, world trade itself is slowing. ECLAC expects global GDP growth to ease from above 3% in 2025 to around 2.9% in 2026, cooling the commerce on which the Panama Canal economy ultimately feeds. Any of these factors, alone or combined, could moderate the projected expansion and expose how vulnerable the country remains to external shocks.

Jobs, informality and the nearshoring bet

Growth has not fixed the labor market. Unemployment reached 10.4% in 2025 and informality exceeds 47%, and ECLAC lists both among the country’s main internal challenges, alongside the quality of education and the territorial gaps between the capital and the provinces. ‘A quality job is the key to reducing inequality,’ Padilla said, arguing for education, fiscal and productive policies that promote social mobility.

The commission’s prescription is to convert interest into employment. It recommends that Panama seize the nearshoring wave that is relocating manufacturing closer to the big consumption centers, especially the United States, and that it climb the value chain — turning bananas, coffee and crustaceans into advanced agroindustry, from dried and canned fruit to cosmetics. Construction and public investment, including the third metro line in Panama City and canal-related works, should also help formal employment if the growth holds above 4%.

What to watch next

Three signposts will show whether ECLAC’s call is right. The first is rainfall: another dry season would test transit capacity and revenue. The second is the Middle East: any durable de-escalation would show how much of the current boom is windfall rather than trend. The third is diversification: whether nearshoring inquiries become factories and whether job creation finally catches up with headline growth.

For now, the Panama Canal economy gives the country a cushion that most of Latin America does not have. ECLAC’s message to policymakers in Panama City is to use that cushion to fix the labor market before the wind shifts.

Frequently Asked Questions

Sources

• www.laestrella.com.pa
• easterncaribbean.un.org

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