Panama’s economy is small, very much open, highly diversified, dollar driven and highly competitive by regional standards. In 2020, the country had an estimated decline in GDP of 17.9%, due to the impacts of the COVID-19 pandemic – mainly the decline in world trade, as transport, logistics, and financial services account for 65% of GDP. However, the Panamanian economy is expected to recover in the coming years, with the IMF’s April 2021 estimates predicting growth of 12% for 2021 and 5% for 2022, subject to post-pandemic global economic recovery.
The following tables and chart will tell the change details in last 5-10 years:
Panama Distribution of workforce from the last 5 years:
Panama Distribution of GDP across economic sectors:
Here attached the last 10 years chart of Panama GDP: (amount in billion USD):
3 Sectors of the Economy – Agriculture, Industry and Services:
Agriculture is an important part in the Panama’s economy. It employs almost 16.61% of the total workforce and contributed almost 2.13% in GDP.
Major agricultural products in Panama include bananas and other fruit, corn, sugar, rice, coffee, shrimp, timber, vegetables, and livestock.
Major products in this Sector:
Bananas: In 2019, bananas production for Panama was 308,837 tons. Though Panama bananas production fluctuated substantially in recent years, it tended to decrease through 1970 – 2019 period ending at 308,837 tons in 2019. In 2019, Panama exported $350M in Bananas, making it the 9th largest exporter of Bananas in the world. At the same year, Banana was the 3rd most exported products in Panama. The main destination of Banana exports are Netherland, Germany, Finland, United Kingdom and Poland.
Sugarcane: In 2019, sugar cane production for Panama was 2.67 million tons. Though Panama sugar cane production fluctuated substantially in recent years, it tended to increase through 1970 – 2019 period ending at 2.67 million tons in 2019. In 2019, Panama supplied sugar with a value of 25.31m USD, an increment of 3.98% from 2018’s total sugar export of 24.342m USD. The annual growth in value of Panama sugar between 2017 to 2018 was 753.207 pc. Between 2017 and 2019, sugar’s exports went up by 2792.16 percent bringing the exporter US$25.31m for the year 2019.
Agriculture Subsidy in Panama:
Panama gives a very negligible amount to farmers in the form of Subsidy. Although there is free trade agreement between US and Panama which helps farmers to export agriculture products.
The U.S.-Panama Trade Promotion Agreement (Panama TPA) entered into force Oct. 31, 2012, expanding market access for U.S. agricultural exporters in one of the fastest growing economies in Latin America. The Panama TPA implementation is especially exciting news for U.S. agriculture since Panama is already an important market for American farmers, ranchers and producers. The country imports 65 percent of its food products from the United States, and major U.S. agricultural exports to Panama include corn, soybean meal, wheat, poultry and rice.
Industry is an important part in the Panama’s economy. It accounts for 29.52% of GDP and employed almost 19.99% of the workforce.
Major Industries in this Sector:
Organic Chemical: In 2019 Panama exported US$1.8 billion worth of organic chemical which make the biggest export in Panama (almost 16.1% of total export). BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from oil and gas to chemicals, plastics, performance products, agricultural products and fine chemicals.
Pharmaceutical: In 2019 Pharmaceutical industry is the second biggest export product in Panama. It exported almost US $1.6 billion worth of pharma products. But, the pharmaceutical market in Panama is extremely dependent on imported products, which make up 90% of the whole, while the remaining percentage is made up of locally produced and distributed drugs (8%) and labeled and processed products in the country (2%), especially in the Colón Free Trade Zone.
Service sector is an important part in the Panama’s economy. It contributes almost 64.97% in the GDP and employed almost 63.4% of the total Panama’s workforce.
Major Industries in this Sector:
Finance: The banking system is the largest part of the republic’s financial sector that contributes a sizable 8 percent to Panama’s GDP. Panama’s banking industry is the most modern and most successful in Latin America, second only to Switzerland in the world. A Panama financial overview reveals that the equity market of the country is small and illiquid. While the banking industry is a favored offshore destination and serves as a significant foreign market, it is still the insurance industry of the country that serves its domestic market. The insurance, securities, and other non-banking sectors are smaller than the banking sector.
Tourism: In 2019, contribution of travel and tourism to GDP (% of GDP) for Panama was 14.9 %. Contribution of travel and tourism to GDP (% of GDP) of Panama increased from 4.1 % in 2000 to 14.9 % in 2019 growing at an average annual rate of 7.96%. he main areas of tourism in the country focus on business tourism, beaches, health and trade. Most of the tourists come from the United States, Canada, Europe, Central America and South America.
Top Companies in Panama
|2||Banco Latinomericano de Comercio Exterior||Banking|
|5||Mossack Fonseca||Business Support Services|
|6||National Bank of Panama||Banking|
|9||Primer Banco del Istmo||Financial Services|