economy of panama

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Economy of Panama

Popularly known as Panama, the Republic of Panama is located in the southern part of Central America. It is a transcontinental country that is part of a natural land bridge that connects the two continents, namely North America and South America. The economy of panama is service based, which means that the economy of Panama heavily invests on the field of banking, commerce and tourism; mainly because of the key topography position of the Republic of Panama.
The foundation of the economy of Panama relies mostly on its well developed service sector. The whole service sector of the economy of Panama represents three-fourths of Panama's Gross Domestic Products. Gross Domestic Product is one of the several gauges of that indicate the size of a region's economy. The well developed service sector of the economy of Panama include the Panama Canal, banking sector, the Colon Free Zone, insurance sector, container ports, flagship registry and the tourism industry.
However, the dropping of the Colon Free Zone and agricultural exports held back the growth of the economy of Panama way back in the year 2000. Not to mention the high oil price hike, and of course, the withdrawal of the military forces of the United States of America. The Gross Domestic Product (or GDP) growth of the economy of Panama on that same year was only about 2.3%, a lot lower compared to its GDP growth in 1999 which was 3.0%. On the other hand, on 2001, the government of Panama has planned additional public works programs, tax reforms, and further agreements regarding its regional trade with the intention of stimulating the growth of the economy of Panama.
The hand over of the Panama Canal and the military installations by the United States of America has paved way to some new construction projects by the Panama government and the private sector of Panama. Despite the fact that Panama has the highest GDP per capita in Central America, almost half of its population or almost 40 percent lives in poverty. The unemployment rate of the Republic of Panama surpassed 14% last 2002. The recent administration of the government of Panama has a more structurally stable and liberalized administration, compared to its predecessor.
The 'purchasing power parity' of the GDP of the economy of Panama has an estimated 18.78 billion dollars by 2003 and the GDP real growth rate has increased to 4.1% on 2003. The GDP of the economy of Panama is composed of: 8.3% by the agriculture sector, 14.7% by the industry sector and 77.1% in the services sector. Their inflation rate by the year 2003 was 1.4%. Also its labor force is composed of 20.8% in agriculture, 18% in industry, and 61.2% on the services sector.

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