Panama is rapidly solidifying its position as one of the most dynamic and attractive destinations for international business in Latin America. Located at the heart of global trade and home to the Panama Canal, it offers unmatched access to both the Atlantic and Pacific markets—making logistics faster, cost effective and more efficient. Backed by a stable, dollarized economy with consistent growth and low inflation, Panama provides a secure and reliable environment for investment.  Entrepreneurs enjoy low tax rates under a territorial system, simplified registration processes, and government policies that actively encourage foreign investment. Adding to its appeal are special economic zones and a network of strategic trade agreements, including a key partnership with the United States, positioning Panama as a natural hub for multinational operations across the Americas. 

Panama also boasts world-class infrastructure in telecommunications and logistic services, ensuring seamless connectivity and operational efficiency. Combined with a high quality of life, tropical climate, and relatively low cost of living, Panama offers the ideal blend of business opportunity and lifestyle. It’s no surprise that more and more global companies are setting their sights on Panama as their launchpad into the Latin American market.
On July 1, 2024, Realizando Metas (RM) President Jose Raul Mulino took the oath of office for a term of five years. His administration was elected on a platform of eradicating corruption, controlling immigration in the Darien gap, resolving the Social Security pension crisis, and promising significant action on crucial trade and foreign policy fronts.  He is also committed to resolve Panama Canal’s critical water shortage that has reduced traffic through the Panama Canal, transited by an estimated 3% of the world’s annual trade and, his major challenge is determining the closure of the largest copper mine in Central America.  

Panama’s GDP grew by only 2.9% in 2024, due to the challenges such as the suspension of activities at the copper mining company and recurring droughts that affected transit in the Panama Canal.  Panama’s economic outlook for 2025 suggests a rebound, with the World Bank forecasting a 3.5% GDP growth, exceeding the regional average. This growth is expected to be driven by strong domestic demand and renewed public and private investment. The IMF is even more optimistic, predicting a 4.5% expansion, citing robust domestic consumption, private investment, and export performance.

However, challenges remain. The fiscal deficit, while significantly down from its 2020 peak, reached 7.35% of GDP in 2024. The government aims for a gradual reduction, targeting 4% in 2025 and eventually 1.5% by 2030 through fiscal consolidation measures. Unemployment saw an increase to 9.5% in 2024, higher than the pre-pandemic level. The closure of a major copper mine and the recent loss of investment grade by some agencies pose significant risks to the Panamanian economy.

Despite these headwinds, the government has approved a $30.1 billion national budget for 2025, prioritizing education, health, security, and access to clean water. International organizations acknowledge Panama’s resilience and potential for growth, emphasizing the importance of addressing structural challenges and implementing strategic reforms to ensure long-term economic prosperity.
Panama’s economy is primarily based on a well-developed services sector that accounts for about 80 percent of GDP with the Panama Canal as the largest economic contributor.  The services sector includes the Canal, banking, tourism, logistics, activities in the Colón Free Trade Zone (CFZ), insurance, container ports, and flagship registry.  

The Panama-David train is the star project of the new government, according to feasibility studies, the project could cost approximately USD$ 4,000 million, would travel at a speed of 160 kilometers per hour and would take an average of 2.5 hours to travel 390 kilometers between Panama and David and will be ready in 6 years.

The U.S. goods trade surplus with Panama was $10.1 billion in 2024, a 3.7 percent decrease over 2023, and U.S. exports to Panama were $10.7 billion, a 3.3 percent decrease from the previous year. Correspondingly, U.S. imports from Panama were $555.8 million, up 5.6 percent increase. Panama was the United States’ 33rd largest export market in 2024.  As for services, U.S. exports to Panama in 2024 totaled $10.7 billion.  This represents a decrease of 3.3. percent ($364.4 million) from the export value in 2023.  In 2025, the trade in services between the United States and Panama continues to be significant, although specific full-year figures are not yet available. Looking at the broader trade relationship, the U.S. remains a key partner for Panama.
While the 2022 figures indicated U.S. service exports to Panama at an estimated $2.4 billion and imports at $2.7 billion, more recent data from early 2025 focuses on goods trade. In February 2025, the U.S. exported $664 million in goods to Panama and imported $43.3 million. Panama has 19 full free trade agreements throughout the Americas, Asia, Europe, and the Middle East.