Panama Economy

Economy

Panama's dollarised economy rests primarily on a well-developed services sector that accounts for four-fifths of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. A slump in Colon Free Zone and agricultural exports, the global slowdown, and the withdrawal of US military forces held back economic growth in 2000-03; growth picked up in 2004 led by export-oriented services and a construction boom stimulated by tax incentives. The government has been backing tax reforms, reform of the social security program, new regional trade agreements, and development of tourism. Unemployment remains high.