PanamaChapters
Explored and settled by the Spanish in the 16th century, Panama broke with Spain in 1821 and joined a union of Colombia, Ecuador, and Venezuela - named the Republic of Gran Colombia. When the latter dissolved in 1830, Panama remained part of Colombia. With US backing, Panama seceded from Colombia in 1903 and promptly signed a treaty with the US allowing for the construction of a canal and US sovereignty over a strip of land on either side of the structure (the Panama Canal Zone). The Panama Canal was built by the US Army Corps of Engineers between 1904 and 1914. In 1977, an agreement was signed for the complete transfer of the Canal from the US to Panama by the end of the century. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the subsequent decades. With US help, dictator Manuel NORIEGA was deposed in 1989. The entire Panama Canal, the area supporting the Canal, and remaining US military bases were transferred to Panama by the end of 1999. An ambitious expansion project to more than double the Canal's capacity - by allowing for more Canal transits and larger ships - was carried out between 2007 and 2016.
Source: The CIA World Factbook - Panama
Key indicators
- Area
- 75,420 km2
- Population
- 3,928,646 (July 2021 est.)
- Government type
- presidential republic
- Languages
- Spanish (official), indigenous languages (including Ngabere (or Guaymi), Buglere, Kuna, Embera, Wounaan, Naso (or Teribe), and Bri Bri), Panamanian English Creole English, Chinese (Yue and Hakka), Arabic, French Creole, (Yiddish, Hebrew, Korean, Japanese)
- GDP
- $52.938 billion (2020 est.)
- Growth rate
- -17.9% (2020 est.)
- HDI
- N/A
- Capital
- Panama City
Macroeconomic indicators
Panama's dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism and Panama is a center for offshore banking. Panama's transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $37 billion in 2016 because of excessive government spending and public works projects. The US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011, and entered into force in October 2012.
Future growth will be bolstered by the Panama Canal expansion project that began in 2007 and was completed in 2016 at a cost of $5.3 billion - about 10-15% of current GDP. The expansion project more than doubled the Canal's capacity, enabling it to accommodate high-capacity vessels such as tankers and neopanamax vessels that are too large to traverse the existing canal. The US and China are the top users of the Canal.
Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points.
Source: The CIA World Factbook - Economic overview Panama
IMF Statistics:
| Subject descriptor | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
|
Gross domestic product, constant prices Percent change (Units) |
15.836 |
10.809 |
7.317 |
2.500 |
3.000 |
|
Gross domestic product, current prices Percent change (Billions) |
67.407 |
76.523 |
83.382 |
87.347 |
91.731 |
|
Gross domestic product per capita, current prices Percent change (Units) |
15,540.795 |
17,409.626 |
18,725.739 |
19,369.476 |
20,092.016 |
|
Inflation, average consumer prices Percent change (Units) |
1.631 |
2.860 |
1.486 |
1.735 |
1.960 |
|
Volume of imports of goods and services Percent change (Units) |
30.591 |
26.406 |
-7.664 |
8.636 |
8.204 |
|
Volume of exports of goods and services Percent change (Units) |
26.867 |
29.284 |
12.086 |
-4.299 |
4.421 |
|
Unemployment rate Percent change (Units) |
11.293 |
8.800 |
7.431 |
8.400 |
8.000 |
|
Current account balance Percent change (Billions) |
-2.051 |
-3.001 |
1.688 |
-1.795 |
-3.114 |
|
Current account balance Percent change (Units) |
-3.042 |
-3.922 |
2.024 |
-2.055 |
-3.394 |
Estimates
Source : IMF Statistics
Relationships with Luxembourg
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
- Convention from 07.10.2010 (Memorial 2011, A No.146, p.2056)
- Effective as of 01.01.2012 (Memorial 2011, A No.146, p.2056)
Air Services agreement
Further information
Foreign Trade
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website of the Statec.
Contact points for Panama
Honorary Consul
Honorary Consul with jurisdiction over the republic of Panama:
Mr August Evaristo SIMONS CHAMORRO
EMPRESAS HOPSA S.A.
Via Transistmica & calle 64 Oeste
Urbanizacion Industrial Los AngelesPanama
Panama City
Republic of Panama
P.O. Box 0834-02767
Tel.: (+507) 302 98 54; (+507) 270 48 32
E-Mail: asimons@hopsa.com
Source: Ministry of Foreign Affairs of Luxembourg
Economic and Commercial Attaché (AWEX)
Mr Pierre ANNOYE
Embajada de Bélgica en Panamá
Torre Optima, Av. Samuel Lewis con Calle 55 Este,
Piso 13, Ciudad de Panamá
Panama
Tel.: (+507) 302-9505 / (+507) 302-9504
E-Mail: panama@awex-wallonia.com
Source: AWEX
Country risk as defined by Office du Ducroire for Panama
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.
Link: http://www.ducroire.lu/node/288
Other useful links:
- CIA World factbook on Panama
- Le Panama sur le site de l'Awex
- Euracen - Belgium-Luxembourg Chamber of Commerce in Central America
- Panama Promotion and Investments Agency
- List of Fairs in Panama
- Economic Opportunities for Foreign Investment in Panama
- Panama Country Factsheet from the Panama Embassy in Brussels
- Panama City of Knowledge
- EU and Central America (website of the European Commission)
- Chambre de Commerce franco-panaméenne