Panama 

Panama country policy

Policy established 01 July 2011

• No Restrictions
• The country ceiling is 500 mln euro
• Early warning signal 400 mln euro
• - of which was used as at 2011-12-31 26 mln euro

Country class: 3

Panama country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  23 May 2011
Country :  PANAMA  

Political Situation

Stable

Head of state
President Ricardo Martinelli.

Form of government
Broad coalition of the Alianza por el Cambio (APC) with Martinelli’s Cambio Democratico as the main party.

Internal Economic Situation
Dynamic Economy

General situation
Very open and dollarised economy, dependent on world trade and capital flows, strongly service-oriented: it has recovered from the dip in 2009, regarding the impressive GDP-growth rates in 2010 (7.5%) and probably 2011 (appr. 7%). The high growth is also heavily based on investments to extend the canal, propelling construction and other domestic sectors, and the free trade zones. Inflation rate appr. 5% which is a little bit too high in view of the competitive position to the USA. Globally integrated and solid banking with a low level of NPL’s. Strengthened supervision. High levels of capitalisation and liquidity. The Canal is contributing to 20% GDP, 40% exportrevenue, 33% fiscal revenue.
 
External Economic Situation
Reasonably Good

Main sources of foreign exchange
Services: canal receipts, off shore banking; bananas, shrimps, sugar, coffee; consumer goods (Colon Free Zone).

Main foreign markets
USA (45%), EU (28%), Latin America (19%), Asia (5%).

Main expenses of foreign exchange
Construction material.
 
Balance of payments 
Large current account deficits are financed by capital imports: FDI, multilateral credits and foreign borrowings.