Panamanian Economy

The privileged geographical position is mostly what Panama depends on. It’s
economy is primarily based on a well-developed service sector, including
banking, insurance, government, trans-Panamanian oil pipeline, the Colon
free Zone and last and most important the Panama Canal. The use of the US
dollar and the Panama Canal spurred the fast growing development of the
service economy and played a significant role in the creation of the Colon
Free Zone and the International Banking Center.

Despite a worsening financial and economic outlook in the US, Panama’s
economy continues to fire up.  Economic activity expanded, driven primarily
by a surge in construction, transport and commerce. Construction of a new
highway between Panama’s two main cities, Panama and Colon, as well as the
high-profile canal expansion project should keep the economy on a decent
growth trajectory in 2008 and beyond.

The economic consulting and financial firms Indesa and Deloitte consider
that the growth of the Panamanian economy will oscillate between 7% and 8%
this year. Which supposes a deceleration with respect to 2007, but a scene
similar to the ones registered between 2004 and 2006.  

Some international institutions, like the Economist Intelligence Unit, have
still better prognoses and bet that Panama will return to be the economy of
greater growth in Latin America this year.

“The dynamism that shows the Panamanian economy, through the important
projects of public and deprived nature that is outlined in 2008, will help
to compensate the negative impacts which they are possible to be registered
in the United States and the region”, says the analysts of Deloitte.