A railroad across the isthmus, completed in 1855, extended economic growth for about fifteen years until completion of the first transcontinental railroad in the United States led to a decline in trans-isthmian traffic. France's efforts to construct a canal across the isthmus in the 1880s and efforts by the United States in the early 20th century stimulated the Panamanian economy.
A railroad across the isthmus, completed in 1855, extended economic growth for about fifteen years until completion of the first transcontinental railroad in the United States led to a decline in trans-isthmian traffic. France's efforts to construct a canal across the isthmus in the 1880s and efforts by the United States in the early 20th century stimulated the Panamanian economy.
The United States completed the canal in 1914.
However, the world depression of the 1930s reduced international trade and canal traffic, causing widespread unemployment in the terminal cities and generating a flow of workers to subsistence farming.
The end of the war was followed by an economic depression and another movement of unemployed people into agriculture. The postwar depression gave way to rapid economic expansion between 1950 and 1970.
The end of the war was followed by an economic depression and another movement of unemployed people into agriculture. The postwar depression gave way to rapid economic expansion between 1950 and 1970.
Most importantly, an increase in world trade provided a major stimulus to use of the canal and to the economy. In the 1970s and 1980s, Panama's growth fluctuated with the vagaries of the world economy.
After 1973, economic expansion slowed considerably as a result of a number of international and domestic factors.
Most importantly, an increase in world trade provided a major stimulus to use of the canal and to the economy. In the 1970s and 1980s, Panama's growth fluctuated with the vagaries of the world economy.
In the early 1980s, the economy rebounded.
The Metrobus and the Metro are the only available public transportation methods. ==Statistics== The following table shows the main economic indicators in 1980–2017. Nominal GDP per capita in Panama was (in balboas or US dollars) 11,691 in 2002, 13,099 in 2004, 14,004 in 2005 (Prelim), 15,141.9 in 2006 (est), as reported by Office of Statistics and Census, Government of Panama.
The acute recession in Latin America after 1982, however, wreaked havoc on Panama's economy.
This period coincided with the rise to power of General Manuel Noriega during which Panama became increasingly indebted. The United States started to pursue Noriega, culminating in sanctions that froze Panama's assets in the United States, and because Panama used the US dollar it was forced to default on its IMF debt in 1987.
The United States invaded Panama in 1989 and forced the surrender of Noriega.
Panama regained access to IMF funds in 1992. After taking office in 1994, President Ernesto Perez Balladares instituted an economic liberalization program designed to liberalize the trade regime, attract foreign investment, privatize state-owned enterprises, institute fiscal discipline.
Panama regained access to IMF funds in 1992. After taking office in 1994, President Ernesto Perez Balladares instituted an economic liberalization program designed to liberalize the trade regime, attract foreign investment, privatize state-owned enterprises, institute fiscal discipline.
After two years of near-stagnation, there was strong GDP growth in 1997–1998.
The most important sectors which drove growth were the Panama Canal and the shipping and port activities of the Colón Free Trade Zone. During the Moscoso administration beginning in 1999, Moscoso attempted to strengthen social programs.
A recent United Nations report highlighted progress in poverty reduction from 2001 to 2007—overall poverty fell from 37% to 29%, and extreme poverty fell from 19% to 12%.
The Metrobus and the Metro are the only available public transportation methods. ==Statistics== The following table shows the main economic indicators in 1980–2017. Nominal GDP per capita in Panama was (in balboas or US dollars) 11,691 in 2002, 13,099 in 2004, 14,004 in 2005 (Prelim), 15,141.9 in 2006 (est), as reported by Office of Statistics and Census, Government of Panama.
Growth from 2002 to 2006 was especially strong in the transport and communications sector, which became the biggest component of GDP, although many sectors also saw strong growth.
Moscoso's administration successfully handled the Panama Canal transfer and was effective in the administration of the Canal. Under the Martín Torrijos administration beginning in 2004, Panama continued strong economic growth and initiated the 2007–2016 Panama Canal expansion project.
The Metrobus and the Metro are the only available public transportation methods. ==Statistics== The following table shows the main economic indicators in 1980–2017. Nominal GDP per capita in Panama was (in balboas or US dollars) 11,691 in 2002, 13,099 in 2004, 14,004 in 2005 (Prelim), 15,141.9 in 2006 (est), as reported by Office of Statistics and Census, Government of Panama.
Dividends paid out of such earnings are free of taxation. In February 2005, Panama's unicameral legislature approved a major fiscal reform package in order to raise revenues from new business taxes, and increases the country's level of debt.
The Metrobus and the Metro are the only available public transportation methods. ==Statistics== The following table shows the main economic indicators in 1980–2017. Nominal GDP per capita in Panama was (in balboas or US dollars) 11,691 in 2002, 13,099 in 2004, 14,004 in 2005 (Prelim), 15,141.9 in 2006 (est), as reported by Office of Statistics and Census, Government of Panama.
Not a CAFTA signatory, Panama in December 2006 independently negotiated a free trade agreement with the US. In May 2009, Ricardo Martinelli was elected president, and promised to promote free trade, establish a metro system, and complete the expansion plan for the Panama Canal. == Economic sectors == ===Financial services=== Panama has a substantial financial services sector and no central bank to act as a lender of last resort to rescue banks that get in trouble.
The Metrobus and the Metro are the only available public transportation methods. ==Statistics== The following table shows the main economic indicators in 1980–2017. Nominal GDP per capita in Panama was (in balboas or US dollars) 11,691 in 2002, 13,099 in 2004, 14,004 in 2005 (Prelim), 15,141.9 in 2006 (est), as reported by Office of Statistics and Census, Government of Panama.
Growth from 2002 to 2006 was especially strong in the transport and communications sector, which became the biggest component of GDP, although many sectors also saw strong growth.
Moscoso's administration successfully handled the Panama Canal transfer and was effective in the administration of the Canal. Under the Martín Torrijos administration beginning in 2004, Panama continued strong economic growth and initiated the 2007–2016 Panama Canal expansion project.
Since the global financial crisis of 2007–08 the country has been trying to shake off its reputation as a tax haven, signing double taxation treaties with many (mostly OECD) countries and in April 2011 a treaty on the exchange of financial information with the United States. ===Agriculture=== Major agricultural products include bananas, cocoa beans, coffee, coconuts, timber, beef, chickens, shrimp, maize, potatoes, rice, soybeans, and sugar cane.
Real GDP rose 7.5% (2003–04), 6.9% (2004–05), 8.1% (2005–06). GDP growth in 2008 was 9.2%, reflecting a slowing of the robust growth of 11.5% seen in 2007.
A recent United Nations report highlighted progress in poverty reduction from 2001 to 2007—overall poverty fell from 37% to 29%, and extreme poverty fell from 19% to 12%.
Strong economic performance had reduced the national poverty level to 29% in 2008. In 2008, Panama had the second most unequal income distribution in Latin America.
Real GDP rose 7.5% (2003–04), 6.9% (2004–05), 8.1% (2005–06). GDP growth in 2008 was 9.2%, reflecting a slowing of the robust growth of 11.5% seen in 2007.
Not a CAFTA signatory, Panama in December 2006 independently negotiated a free trade agreement with the US. In May 2009, Ricardo Martinelli was elected president, and promised to promote free trade, establish a metro system, and complete the expansion plan for the Panama Canal. == Economic sectors == ===Financial services=== Panama has a substantial financial services sector and no central bank to act as a lender of last resort to rescue banks that get in trouble.
In 2009 agriculture and fisheries made up 7.4% of Panama's GDP Panama is a net food importer and the United States is its main supplier.
Although growth slowed to 2.4% in the first half of 2009, due to the global economic downturn, it is expected to improve in 2010 and is still one of the most positive growth rates in the region.
As a result of this growth, government deficit as a percentage of GDP dropped to 43% in 2009, and government-issued debt achieved investment grade in February 2010.
Panama City's streets experience frequent traffic jams due to poor planning. "Diablos Rojos" are not allowed to operate in Panama city since 2010, except for recreational purposes.
Although growth slowed to 2.4% in the first half of 2009, due to the global economic downturn, it is expected to improve in 2010 and is still one of the most positive growth rates in the region.
As a result of this growth, government deficit as a percentage of GDP dropped to 43% in 2009, and government-issued debt achieved investment grade in February 2010.
Since the global financial crisis of 2007–08 the country has been trying to shake off its reputation as a tax haven, signing double taxation treaties with many (mostly OECD) countries and in April 2011 a treaty on the exchange of financial information with the United States. ===Agriculture=== Major agricultural products include bananas, cocoa beans, coffee, coconuts, timber, beef, chickens, shrimp, maize, potatoes, rice, soybeans, and sugar cane.
As a result, Panamanian banks are very conservatively run, with an average capital adequacy ratio of 15.6% in 2012, nearly double the legal minimum.
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