Panama Economic Forecast

Supporting the economy of Panama is the services sector, which actually accounts for around 80% of the country’s Gross Domestic Product. As a part of this sector are financial institutions, banks, and financial services. In addition to this, the growing services sector includes insurance, flagship registry, container ports, transportation, tourism, and the Colon Free Zone. With the expansion of the famous Panama Canal scheduled to complete in 2014, the GDP will be boosted even more by doubling the canal’s ability to allow ships to pass through.

Supporting the economy of Panama is the services sector, which actually accounts for around 80% of the country’s Gross Domestic Product. As a part of this sector are financial institutions, banks, and financial services. In addition to this, the growing services sector includes insurance, flagship registry, container ports, transportation, tourism, and the Colon Free Zone. With the expansion of the famous Panama Canal scheduled to complete in 2014, the GDP will be boosted even more by doubling the canal’s ability to allow ships to pass through.

While tremendous progress has been seen with the Panama economy, the country still faces challenges to include a high poverty and unemployment level. In fact, of all countries in Latin America, Panama is rated as the second most unequal distribution of income. To correct the problem, the country’s government has implemented new reform for social security, tax, and agreements and development specific to transportation and tourism.

Panama GDP Forecast

One of the interesting things about the Panama GDP (Gross Domestic Product, Current Prices, US Dollars) is that during the global financial crisis, it was the only country in Latin America to see growth. As mentioned, with the Panama Canal being expanded, officials are confident that the economy will experience even more growth and stability. When looking at the Panama GDP in 2008, numbers were at $23.18 billion in US dollars. Then while other countries were struggling, 2009 closed at $24.711 billion, a slight 6.59% change from the prior year. With this, Panama was listed for world ranking at number 89. Now, in looking at the future, experts forecast that 2010 will end with a GDP around $26.73 billion, showing another small change but for 2015, expected change is greater, closing the GDP at $43.217 billion in US dollars.

Panama Unemployment Forecast

Currently, the Panama population is around 3.4 million for this free flowing economy. Although this Latin American country has experienced growth and stabilization of the economy, the grossly off balanced income distribution has forced more than 28% of the population lives below the poverty line. In addition, the Panama unemployment rate is high, reported at 7.1%. Once the Panama Canal expansion is done in 2014, experts are optimistic things will turn for the better.

Panama Inflation Rate Forecast

Regarding the Panama inflation rate, forecasters use an index of 2000=100 to determine the future of average consumer prices. At the end of 2008, the country’s inflation was at 8.76% but over the next 24 months, a 72.47% reduction was seen. With this, 2009 closed at 2.411%, placing the country at number 104 for world rankings. Using the same index, experts believe the inflation rate for Panama for 2010 will be 3.30%. For 2015, not much of a change is expected, with predictions at 2.5%.

Panama Current Account Balance Forecast

Forecasters also look at the Panama current account balance, which is based on all transactions excluding capital and financial items. By 2009, the numbers were at minus $0.012 billion (US dollars), which let the country at a world ranking of number 56. From 2008, which closed at a negative $2.69 billion, this was a significant reduction of 99.55%. The forecast for the future in 2010 is that the current account balance will be at a negative $2.26 billion. Going out further to 2015, experts predict only a slight change that would put the year-end account balance at minus $1.845 billion in US dollars.