Countries › Panama › Guide › 2. Macro and country context › Panama economy at a glance: growth, prices, banking, ratings and the lists that matter

Panama economy at a glance: growth, prices, banking, ratings and the lists that matter

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Last verified: 2026-10-29 · Status: Changing

Panama is a dollarized, services led economy of about US$90.5 billion (2025 nominal GDP, INEC), built on the Canal, logistics, banking, commerce and the Colón Free Zone. Real GDP grew 4.4 percent in 2025 and 6.4 percent in the second quarter of 2026 (5.5 percent in the first half), while urban consumer prices rose 2.8 percent in the year to September 2026. S&P rates the sovereign BBB- (stable) and Moody's Baa3 (negative outlook). The EU removed Panama from its list of non cooperative tax jurisdictions on 9 October 2026, and the FATF ended its increased monitoring in October 2023.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender; the Superintendencia de Bancos states that the official currency is the balboa, whose value is on a par with the United States dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Nominal GDP 2025 (estimate)	90462.6 USD millionINEC PIB anual 2025 (E), as of 2025-12-31 · in force
Nominal GDP 2025 (estimate), balboas	90462.6 PAB millionINEC PIB anual 2025 (E), as of 2025-12-31 · in force
Real GDP growth 2025 (estimate)	4.4 %INEC PIB anual 2025 (E), as of 2025-12-31 · in force
Real GDP growth, Q2 2026 year on year	6.4 %INEC PIB trimestral II 2026, as of 2026-06-30 · in force
Real GDP growth, January to June 2026	5.5 %INEC PIB trimestral II 2026, as of 2026-06-30 · in force
Urban CPI, 12 months to September 2026	2.8 %INEC IPC Nacional Urbano base 2024, as of 2026-09-30 · in force
Urban CPI, September 2026 month on month	0.5 %INEC IPC Nacional Urbano base 2024, as of 2026-09-30 · in force
Total assets of the Sistema Bancario Nacional, August 2026	150333.9 USD millionINEC PIEM cuadro 5a, as of 2026-08-31 · in force
S&P long term foreign currency rating	BBB- (stable) ratingMEF communiqué 22 September 2026, as of 2026-09-22 · in force
Moody's sovereign rating	Baa3 (negative outlook) ratingMEF communiqué 13 November 2025, as of 2025-11-13 · in force
Currency regime	Dollarized: US dollar legal tender at par with the balboa textLey 84 de 1904 art. 1, as of 2026-10-29 · in force
EU list of non cooperative tax jurisdictions	Removed from Annex I, placed in Annex II statusCouncil conclusions of 9 October 2026, as of 2026-10-09 · in force

The rule

1. Official GDP is the figure computed by the Instituto Nacional de Estadística y Censo (INEC) of the Contraloría General de la República; the fiscal rule measures every deficit and debt ceiling against that INEC GDP. For 2025, INEC estimates nominal GDP at B/.90,462.6 million (4.6 percent above 2024) and real GDP, in chained volumes with reference year 2018, at B/.84,752.9 million, a real increase of 4.4 percent. The 2025 figures are estimates (E) and will be revised.
Example: 2025 nominal GDP B/.90,462.6 million; divided by INEC's mid 2025 population estimate of 4,598,365 this is about B/.19,673 per person. / About US$90.46 billion, or about US$19,673 per person (balboa at par).Ley 34 de 2008 (Responsabilidad Social Fiscal), art. 10 as replaced by Ley 445 de 28 de octubre de 2024 art. 3; INEC, PIB anual 2025 (E), Ley 34 art. 10, 2024-10-28 official text · verified 2026-10-29

2. Growth in 2026 is running above 2025: INEC reports real GDP growth of 6.4 percent in the second quarter of 2026 (B/.20,069.2 million in chained volumes, up B/.1,204.3 million) and 5.5 percent for January to June. Drivers were Canal operations, air transport, Colón Free Zone trade, banana exports, ports, commerce, construction and financial intermediation; information and communication was the only activity to contract.INEC, Producto Interno Bruto trimestral, II trimestre de 2026 (published 15 September 2026), Comentarios 2T 2026, 2026-09-15 official text · verified 2026-10-29

3. The Ministry of Economy and Finance (MEF) reported on 8 October 2026 that the IMF Article IV mission (23 September to 6 October 2026) projects growth close to 5 percent in 2026 and 4 to 5 percent over the medium term, and describes banks as well capitalized and profitable. These are projections, not official statistics.MEF communiqué on the IMF 2026 Article IV concluding statement, Communiqué of 8 October 2026, 2026-10-08 official text · verified 2026-10-29

4. Prices are measured by INEC's Consumer Price Index (IPC Nacional Urbano, base 2024 = 100). In September 2026 the index stood at 102.5, up 0.5 percent on the month and 2.8 percent on September 2025 (3.0 percent in Panamá province, 2.7 percent in the rest of urban areas). Panama sets no policy interest rate of its own: the US dollar is legal tender at par with the balboa (Ley 84 de 1904) and the Constitution bars forced circulation of paper money (art. 262), so local interest rates follow US dollar conditions and bank funding costs.
Example: A lease of B/.10,000 a month indexed to the 12 month IPC to September 2026 would rise 2.8 percent to B/.10,280. / US$10,000 to US$10,280 a month.INEC, Índice de Precios al Consumidor, septiembre 2026, Comentario IPC septiembre 2026, 2026-10-14 official text · verified 2026-10-29

5. The banking system is large relative to the economy: total assets of the Sistema Bancario Nacional were B/.150,333.9 million at the end of August 2026 (up 6.7 percent year on year), with loans of B/.92,859.5 million, of which B/.64,251.9 million to domestic borrowers and B/.28,607.6 million abroad. Assets equal roughly 1.7 times 2025 nominal GDP.
Example: B/.150,333.9 million of bank assets against B/.90,462.6 million of 2025 GDP. / About US$150.3 billion of assets.INEC, Principales Indicadores Económicos Mensuales, enero a agosto 2025 a 2026, cuadro 5a Sistema Bancario Nacional, Cuadro 5a, 2026-10-15 official text · verified 2026-10-29

6. Sovereign ratings: on 22 September 2026 the MEF reported that S&P Global Ratings affirmed Panama at BBB- long term and A-3 short term, foreign and local currency, outlook stable, with transfer and convertibility assessment AAA. On 13 November 2025 the MEF reported that Moody's affirmed Baa3 with a negative outlook. In October 2026 Moody's also rated the local Treasury programmes: (P)P-3 for Letras and (P)Baa3 for Notas del Tesoro.MEF communiqués on sovereign rating actions, Communiqués of 13 November 2025, 22 September 2026 and 19 October 2026, 2026-09-22 official text · verified 2026-10-29 · changed: 22 September 2026: S&P affirmed BBB- with stable outlook. 19 October 2026: Moody's assigned first ratings to the local Letras and Notas del Tesoro programmes.

7. The EU Council removed Panama from Annex I (non cooperative jurisdictions for tax purposes) on 9 October 2026 and moved it to Annex II pending a Global Forum review of its exchange of information framework. The Commission links the decision to the reform of the foreign source income regime, enacted as Ley 526 de 28 de mayo de 2026 (economic substance, Código Fiscal arts. 707-A onward, applying from fiscal year 2027). Separately, the FATF ended Panama's increased monitoring (grey list) on 27 October 2023.Council of the EU conclusions on the EU list of non cooperative jurisdictions (9 October 2026); FATF plenary outcome (27 October 2023), Annex I and Annex II of the Council conclusions, 2026-10-09 official text · verified 2026-10-29 · changed: 9 October 2026: Panama removed from EU Annex I and placed in Annex II (pending Global Forum review). Annex I now lists 8 jurisdictions.

8. The Cobre Panamá copper mine in Donoso remains without extraction under a State ordered preservation plan. On 30 September 2026 an interministerial commission (Commerce and Industry, Economy and Finance, Environment) delivered its final report to the President: it takes no decision, recommends evaluating an agreement that resolves the pending arbitrations and leads to an orderly closure at no cost to the budget and in compliance with the Supreme Court ruling, and estimates that the country forgoes B/.6.85 million a day in foreign exchange and that closure without agreement would cost B/.2,600 to 3,400 million. The decision rests with the President.
Example: B/.6.85 million a day is about B/.2,500 million a year (365 days). / About US$2.5 billion a year of foregone foreign exchange, per the commission's estimate.MEF publication of the Informe Final de la Comisión Interministerial sobre el sitio minero Cobre Panamá, Informe Final, recommendations and criteria, 2026-09-30 official text · verified 2026-10-29 · changed: 30 September 2026: final report delivered and published; no presidential decision announced as of 29 October 2026 in the official sources checked.

Indicator	Value	Period	Source
Nominal GDP	B/.90,462.6 million	2025 (E)	INEC
Real GDP growth	4.4%	2025 (E)	INEC
Real GDP growth	6.4%	Q2 2026	INEC
Real GDP growth	5.5%	January to June 2026	INEC
Urban CPI inflation	2.8%	12 months to September 2026	INEC
Unemployment rate	8.5%	August 2026	INEC labor survey
Non financial public sector deficit	3.68% of GDP (B/.3,320.8 million)	2025	MEF
Public debt	B/.59,349.3 million	End 2025	MEF
Bank system assets	B/.150,333.9 million	End August 2026	INEC
Current account balance	minus B/.1,074.1 million	2025 (P)	INEC
Population	4,645,375	1 July 2026 (projection)	INEC

Panama headline indicators (INEC, MEF; balboa = US dollar)

Activity	Real growth 2025
Transport, storage and mail (includes the Canal)	14.5%
Hotels and restaurants	5.9%
Financial and insurance activities	5.2%
Real estate, professional and support services	4.3%
Electricity and water	3.9%
Commerce	3.6%
Mining and quarrying	3.3%
Education	3.2%
Construction	2.7%
Information and communication	1.4%
Manufacturing	1.1%
Agriculture, livestock and fishing	minus 1.7%

2025 real growth by activity (INEC, PIB anual 2025 (E))

Worked example

Sizing a market entry. A consumer business targeting 1 percent of household spending growth should start from INEC's nominal GDP of B/.90,462.6 million for 2025 (4.6 percent nominal growth) rather than a regional average, and from the 2.8 percent urban CPI to September 2026 for price assumptions. In US dollars the numbers are identical, so there is no currency translation step.
Pricing a 5 year US dollar contract. With no exchange rate risk inside Panama, the main inflation risk on a B/.1,000,000 a year contract (US$1,000,000) is local price drift: at 2.8 percent a year the year 5 value would be about B/.1,116,800 (1.028 to the power of 4, times 1,000,000). Index to INEC's IPC if you need protection.

Step by step

1. Use INEC releases as the base for any Panama model: annual GDP (March), quarterly GDP (about 75 days after quarter end), monthly CPI (around the 14th of the following month) and the monthly economic indicators (PIEM). Put them on your planning calendar at /calendar/.
2. For fiscal and debt risk, read the MEF monthly fiscal balance and the fiscal rule path in macro/public-finances-budget-and-debt.
3. For EU counterparties, check whether your payments to Panama were caught by member state defensive measures linked to Annex I and how they change after the 9 October 2026 removal; see taxes/economic-substance-foreign-passive-income.
4. Track the Cobre Panamá decision and Canal results (macro/panama-canal-and-the-economy), which move exports, the current account and public revenue.

Common traps

Treating 2025 GDP as final. INEC marks 2025 as estimated (E) and quarterly 2026 figures as preliminary; revisions of several tenths of a point are normal.
Reading a low CPI as a low cost base. The IPC measures urban consumer prices; labor, energy and rent costs in Panama City can move differently. Check the labor section for wage floors.
Assuming EU Annex II means fully cleared. Annex II lists jurisdictions with pending commitments; Panama is there pending a Global Forum review, and EU lists are reviewed twice a year.
Comparing Panama's bank assets with GDP as a credit risk signal on its own. About a third of bank loans (B/.28,607.6 million in August 2026) are to borrowers abroad; the system is an international banking center.
Mixing up fiscal years. The State budget follows the calendar year, while the Panama Canal Authority's fiscal year runs from 1 October to 30 September.

Sources

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