Panama

Panama: strong, sustained growth, 1980–2025

The Panama Canal and an extensive logistics, banking, and shipping sector built around it have made Panama one of the fastest-growing and most dollarized economies in Latin America. Between 1980 and 2025, Panama's GDP per capita grew from $2,357 to $19,790 (current US$), a compound annual growth rate of 4.8% — strong, sustained growth. Annual GDP growth averaged 5.0% with a year-to-year standard deviation of 5.9 points, reflecting considerable volatility and periodic crises. Structurally, agriculture's share of the economy moved from 7.4% to 2.6% of GDP (a classic decline as the economy industrialized/modernized), while services rose from 64.6% to 70.0% of GDP, underscoring a shift toward a services-driven economy. On human development, life expectancy rose from 69.5 to 79.8 years, while tertiary school enrollment moved from 20.6% to 53.7%, while the urban population share grew from 49.8% to 66.2%.

What this growth cost: Growth was not without cost: per-capita CO2 emissions rose from 1.63 to 2.74 tonnes CO2e per person; income inequality (Gini index) narrowed from 58.5 to 49.7; the poverty headcount ratio fell from 29.8% to 3.1%.