Panama's GDP grows 4.8% in Q1 2026, boosted by Canal and construction

Panama's Gross Domestic Product (GDP) expanded by 4.8% in the first quarter of 2026 compared to the same period last year, fueled by strong performance in the Panama Canal, construction, and trade sectors. The National Institute of Statistics and Census (INEC) reported that GDP reached $22.55 billion by the end of March, an increase of over $1 billion.

The transportation, storage, and mail sector led the growth with an 8.2% expansion. This surge was significantly boosted by a 5.4% rise in Canal transit fees, attributed to an increase in daily ship passages. The Canal, which handles 3% to 6% of global trade, has seen higher traffic recently, with up to 41 crossings per day compared to the usual 36 or 37, partly due to disruptions from the Middle East crisis.

Construction activities grew by 6.5%, driven by both residential building projects and public infrastructure works. The commerce sector also experienced a robust 6.4% growth, primarily due to increased sales of fuel, construction materials, textiles, food and beverages, and automobiles.

Other sectors showing positive growth include private education (3.7%) and manufacturing (3.4%), with increases in meat production, alcoholic beverages like beer and rum, and cement manufacturing. However, the agricultural sector contracted by 4.3%, mainly due to a sharp decline in banana exports (-80.6%) and reduced production of milk (-11.6%). The banana industry is still recovering after a strike last year, with a new production model being established by Chiquita.

Panama, which holds investment grade ratings of BBB- from S&P and Baa3 from Moody's, saw 4.4% GDP growth in 2025. International organizations project growth between 3.8% and 4.1% for the current year.