IDBeconomics Panama: opportunities overview

Panama is a growth benchmark for Latin America and the Caribbean. The average annual increase in GDP between 2000 and 2019 has been close to 6 percent. Despite post-pandemic challenges, the average increase has been 4 percent through 2023. While this progress has brought the country closer to the income levels of more advanced economies, significant challenges remain, such as territorial imbalances, reduced fiscal space and insufficient social spending, which have led to strong disparities in people's standard of living. In this context, it is essential to implement a series of measures to reduce inequality, facilitate productive diversification and promote efficient and sustainable management of both financial and natural resources, especially water. It is key to support the sectors that have driven previous growth, while raising the quality of life of Panamanians. Consolidating itself as a high-income economy, in an inclusive and sustainable manner, is both an immense challenge and a great opportunity. This IDB Group document, precisely, identifies opportunities in three thematic pillars: human development, foundations for productivity and institutional modernization that can contribute to the definitive fulfillment of this great objective.