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Panama's economy grows, but investment and jobs remain key challenges, says Apede
🇵🇦 Panama /Economy & Trade

Panama's economy grows, but investment and jobs remain key challenges, says Apede

From TVN Panamá · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

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  • Panama's economy grew 4.8% in the first quarter, with the Monthly Economic Activity Index up 5.96% in April, according to the Panamanian Association of Business Executives (Apede).
  • Despite job contract increases, most are temporary, highlighting the challenge of creating stable, quality employment.
  • Foreign direct investment fell 63.1% in 2025, reflecting reduced confidence, while Panama faces a less favorable international economic environment.

Panama's economy shows robust growth in early 2026, with the Gross Domestic Product (GDP) expanding 4.8% in the first quarter and the Monthly Economic Activity Index rising 5.96% in April. The Panamanian Association of Business Executives (Apede) reported these figures, noting a significant recovery in the labor market with over 112,000 job contracts registered between January and April, a 20.5% increase from the previous year.

although the Panamanian economy has performed well so far this year, the main challenge remains transforming that growth into more private investment, stable jobs, and sustainable development.

— ApedeThe Panamanian Association of Business Executives (Apede) issued a warning about the country's economic situation.

However, Apede cautions that the majority of these new contracts are for fixed terms or specific projects. The primary challenge remains generating stable, high-quality formal employment. Key economic drivers like logistics, commerce, construction, tourism, and services, along with the Panama Canal and the Colón Free Zone, continue to fuel national economic activity.

Financially, the non-financial public sector deficit narrowed to 1.46% of GDP by April, with state revenues increasing by 13.2%. Yet, concerns persist regarding rising public debt, increased current spending, and reduced public investment. A stark warning comes from the 63.1% drop in foreign direct investment in 2025, indicating a decline in business confidence for expanding productive operations in Panama.

the majority of those contracts correspond to defined modalities or for a specific work, so the challenge continues to be the generation of formal, permanent, and higher quality employment.

— ApedeApede highlighted the nature of recent job contract increases.

Facing a global economic slowdown, higher interest rates, and energy market volatility, Panama's continued dynamism hinges on internal factors such as fiscal stability, legal certainty, productivity, and attracting new investments. Despite these challenges, a J.P. Morgan assessment suggests Panama can maintain its investment grade, supported by fiscal consolidation and economic growth.

Panama maintains conditions to preserve the investment grade granted by Moody's, thanks to the progress of fiscal consolidation, economic growth, and the performance of the Panama Canal.

— J.P. MorganAn assessment by J.P. Morgan on Panama's financial standing.
DistantNews Editorial

Originally published by TVN Panamá in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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