The Economy In Panama Today (2023)

Last Updated on October 7, 2026 by Retire in Panama

I am writing this article after 11 years of living in Panama full-time in different areas of the country. Over the years, our relocation company has assisted many people in moving to Panama, helping them with everything from immigration, healthcare, housing, shipping belongings, and more. I am also a very frugal shopper and have continuously monitored prices.

Panama has become an increasingly popular choice for those looking to retire, invest, or relocate, with 1000s of expats moving here annually. This article will examine Panama’s economy and discuss the Gross Domestic Product (GDP), inflation trends, income tax, wages, and financial benefits of living there. I will cite sources of all my numbers, except if they are personal experiences.

By the end of this article, you should understand Panama’s economy well and why it is such a great place to live. I will tick off a few people with the article, but it’s all about the truth and facts, not personal opinions.

Overview Of The Panama Economy In 2023

Panama is a country that has seen a lot of growth in the 11 years that I have been here. In the years after 2011, it had the highest GDP growth in the Americas for several years. This, coupled with low inflation and unemployment, Panama’s economy was steamrolling by the decade’s end; what could stop it? . . . Enter a Global Pandemic!

Well, we all know what happened in early 2020, halting countries’ economies worldwide. We will look at the economy of Panama pre and post-COVID and where we are now in early 2023. You may find it quite surprising where Panama’s economy is today, much healthier than much of the world, and let us look at why?

GDP & Economic Growth

Panama is a country with a strong and growing economy. Driven by Canal tolls and spun-off logistics activities, the service sector, including banking, tourism, and agriculture., These sectors have been growing steadily for the past few years. Significant investment opportunities are available due to Panama’s tax incentives and supportive government policies. As Panama continues to grow, its economic prospects remain strong.

The chart below shows Panama’s GDP growth only twice below 3% and several years over 10%. From 2010 – 2016 Panama’s average GDP growth put it as the top growth country in all of the Americas.

 

But, let’s look closer from 2017 on to see the effect of COVID and the economic recovery through this time.

Panama’s GDP for 2018 was $64.93B, a 4.38% increase from 2017.

Panama’s GDP for 2019 was $66.98B, a 3.16% increase from 2018.

Panama’s GDP for 2020 was $53.98B, a 19.42% decline from 2019.

Panama’s GDP for 2021 was $63.61B, a 17.84% increase from 2020.

Source

Panama’s GDP for 2022 was $67.55B, a 6.2% increase from 2021. (Final Estimate) Source

Panama’s GDP for 2023 will be $70.25B, a 4.0% increase from 2022. (early Estimate) Source

To understand Panama’s current economic status, we can look at GDP data from the International Monetary Fund (IMF). Between 2012 and 2017, GDP growth averaged over 5%. In addition, since 2014, Panama has maintained a positive external balance (net exports plus net income from abroad), indicating that it can generate Foreign Direct Investment (FDI) to maintain its current account balance. 

This demonstrates that Panama can manage its affairs – something that many countries struggle with in today’s economy. This economic growth and strength also put us in a better place than many counties, even North America, to weather the COVID Storm. Indeed, you have to look at more than GDP to determine a country’s economic health.

Inflation Trends And Interest Rates

Inflation is hitting worldwide and varies a lot from country to country. Not all countries see inflation rates like the USA, and some are seeing much higher ones, like Russia, Brazil, the UK, and Spain.  

In 2007, and 2008, Panama experienced some high inflation at 4% and 8%, but since then, the rate has averaged closer to 2%

Source

The 2022 estimate was 4.0%, but it is expected to come in much lower, closer to 3.3% 

The inflation rate started high in the first six months of 2022. But, in August, the government made a deal with protestors, protesting high prices. Caps were put on gasoline and essential grocery items, dropping prices considerably; thus, an average annual inflation rate ended much lower than expected. In the region, Panama has a very low inflation rate compared to the following:

Nicaragua 11.5%

Costa Rica 11.4%

Honduras 10.9%

Guatemala 8.3%

Source

When expats are not seeing low inflation, it is because of their buying habits. Suppose you are buying goods imported from the USA. In that case, you are paying for US inflation and significant increases in freight to get the product here. With a ten-year average of 2% in Panama’s inflation, that means, on average, goods have gone up 22% in 10 years. 

You can certainly see that in the local grocery stores. Panama chicken, thighs, and legs were $1.00/lb when I moved here, today, they are $1.20. A dozen eggs in the grocery store was $1.65, today, they are $1.90. A dozen free-range eggs were $2.50, and today $3.00. You will find dairy more expensive and, unfortunately, also bacon; they always have been more costly than in North America.

BUT, the expat that cannot live without their Skippy Peanut Butter or California almonds is seeing sticker shock. What irritates me about this is that they start saying, “It is getting too expensive to live in Panama.” So I say, “Start Living in Panama and not back home!” You are not going to die eating Panama peanut butter :)

Let’s look at other costs associated with living in Panama.

Electricity – $0.17 per kilowatt hour. (this was $0.16 when I moved here 11 years ago) You also receive 25% off if you are a pensionado; there is a subsidy discount now. Click HERE to see my current month’s electricity bill of $25.22 (disclaimer, I do not use air conditioning in Boquete)

Gas – Panama uses gas primarily for stoves, instant water heaters, and dryers. There is no natural gas distribution system, so they use 25lb propane tanks, which are available everywhere, that you can exchange for a full one for $5.37. When I moved here 11 years ago, they were $5.18.

High-speed Internet. Fiber internet prices have dropped almost every year since I moved here, with speeds increasing. I have a 300-meg fiber service for $39.00 a month. My first fiber internet eight years ago was $60 a month for $60 meg.

Cell Phones – Between $20 and $35.00 a month, depending on how much data you need on post-paid plans. My first cell phone plan in Panama was $35.00 a month; I currently pay $22.00 monthly.

Fuel– All gas and diesel for residents is $3.25/gallon. (This has been subsidized by the government since the last August when we were over $5 a gallon. The actual price is $3.78 a gallon or $1.00 a liter. We are not sure when the subsidy will end.

Clothing – I find clothing relatively inexpensive here. I bought a pair of Levis 501s last week at PricemART (Costco) for $35.  

Car Insurance – A new average car, between $600 – $800 a year. A ten-year-old car, liability only, $350./year

Housing Costs in Panama

Rentals in Panama

I will take some flack for this one from some of my real estate friends. Prices in Panama for rentals have remained relatively stable for the last ten years. If you have some excellent resources and know where to look, you can find great prices in rentals. Being in the relocation business like we are, we assist our guests in moving to Panama to find their perfect rental to begin their life here.

In Panama City, rental prices are lower than ten years ago. In 2012, I rented a two-bedroom apartment in Plaza Edison for $1150 a month. That same apartment today rents for $950. On Balboa avenue in 2012, to get a one-bedroom, you were looking at starting at $1500; today, $1100.

In the Coronado beaches area, rentals prices over the last ten years have not increased much, in some cases lower.  

The prices in Boquete are reasonably flat, and there are great deals if you know where to look. In Boquete and Coronado areas, you always see higher rental prices from December through March, which is the high season. If you are looking for the long term, only look during those months. 

For those who do not know, Valle Escondido is one of Panama’s premier gated communities. Here are some examples. In Valle Escondido, the condos there are very popular with Expats. They have rented for between $1500 and $2000 a month, depending on the unit, for the last five years and still are at that price today. We secured two of these units for our guests in 2022. But, don’t worry, all rents in Boquete are not in that price range, but these units in this prestige gated community are nice.

One of my first places in Boquete was in Alto Boquete, a two-bedroom, two-bath A-frame house on a 1/4 acre gated fenced property. The rent was $500 a month. I stayed in that home for five years, it has had two renters since, and the rent is still $500.

I recently made a move into downtown Boquete. I rented a two-bedroom house in a tranquil Panamanian neighborhood three blocks from the center of town, across the street from the new Boquete Park. I pay $600 a month. I asked the owners how long they have been renting at that price, and they told me they increased it from $500 to $600 seven years ago.

Oscar & Megan also recently moved into Boquete town to a 2,000 square foot, four bedroom, four bath modern family home at $800 a month.

Sorry, but this is where we plug our company. If you have been on a Retire in Panama Tours, we will use all our resources to help find you the perfect home in Panama at the best price! The best deals always go to our pasts guests first.

 

Real Estate in Panama 

Panama City and Coronado beaches area have some fantastic deals regarding real estate prices. We last saw condos in the $150,000 range long ago, but we are seeing them now again.

Boquete, through 2022 was seeing price increases in real estate. This was primarily due to (in my opinion) expats, and some real estate agents, selling and thinking because of worldwide inflation; they could get more for their homes. This happened in some rentals also, but overpriced homes stayed on the market, and overpriced rentals stayed empty.  

Now we are seeing something Boquete has not seen a lot of “Price Reduction” marketing ads, which shows the market was over-inflated.

A significant saving in real estate in Panama is property taxes. Property taxes have actually decreased twice since I have been here. Currently, there is no tax up to $120,000, then a 0.5% tax on the value between 120,000 and $750,000, then .075% on any value over $750,000. So, if you purchase a $250,000 home, your property taxes will be $650 a year. There are also tax exemptions on newly built property from 5 – 20 years.

 

Retirement Income & Income Tax 

This section will outline some key advantages of moving to Panama for retirees. We’ll also discuss some tax benefits available to those working remotely for foreign companies.

In Panama, your retirement income will not be taxed by Panama. Panama has a territorial tax system, meaning it only taxes the income of its residents that is Panamanian sourced. Foreign income is not taxed.

This territorial tax system is excellent for remote workers. They can come to Panama, continue working remotely, not needing a work visa, and owe no tax on their foreign income. You will need a residency visa, so look at the Friendly nations Visa or Short Stay Visa. You can read about those visas here.

Employment Opportunities & Wages

Pre-COVID, the unemployment rate in Panama was around 5%. In 2020 during the pandemic, it rose to 18.5%, then in 2021 dropped to 14.5%, and by the end of 2022 was 8.4%. The unemployment rate is expected to continue its downward trend into 2023. 

Source

Wages in Panama are much lower than in North America. With a minimum monthly salary of $300 – $400 in the service and professional industries, you can see some salary examples below.

Source

There are not a lot of jobs available in Panama. Since COVID, the unemployment rate has not recovered to pre-pandemic times, so finding a job here is problematic. If you are coming to Panama to work, you will need a job offer even before starting the process so that you can get started on a visa and work permit. Often, foreign companies operating in Panama are looking for English-speaking employees. Also, computer programming and computer security jobs can be available for foreigners in the tech industries.

Financial Benefits of Living In Panama

You can only talk about economics in Panama if you talk about the financial benefits of living in Panama. One of the main reasons people move to or retire in Panama is that their fixed income will go farther than in their home country.

As you have read, inflation is only a problem in Panama as long as you can do without your imported goods. Your utilities can be a huge monthly saving. Remember the Pensionado discounts for retirees; that can also save you a lot of money.

The cost of housing can be very reasonable in Panama. Also, property taxes are low.

In Summary

The Panama economy is continuing to grow and steadily recovering from the pandemic, especially compared to other countries worldwide. This makes it an excellent place for retirees and people looking for a change of scenery. Your new life in Panama awaits you, and we at Retire in Panama would love to help make it happen for you.

 

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