Heritage.org has ranked Panama as the 62nd freest economy in the freest economy index of 2021. In the North and South American region, Panama has ranked 10th, beating countries like Mexico and Brazil. Panama has a human population of 4.28 million. According to the World Bank data, the unemployment rate in the country in 2019 was as low as 4.74%, but with the outbreak of the pandemic followed by an economic crisis, the unemployment rate of Panama rose to 10.23%. The focus of the Panama government is to secure the economy from destabilization and lower the unemployment rate as much as possible.
Panama is a beautiful country located between North America and South America. It meets at the crossroads between the Atlantic and the Pacific Ocean. The Panama Canal, whose full control was given to the country in 1999, has helped in shaping the country’s economy. Panama has one of the freest economies, but it must work a lot to make its ranking better in global economic indices.
Overview of Panama
According to Statista, Panama’s economic growth rate by real gross domestic product GDP for 2019 was 3.04%. This economic growth rate went through a major dip in 2020 after the COVID-19 pandemic. The economic growth rate in 2020 declined by 17.95% as compared to the previous year. In 2020, the services sector accounted for a whopping 67.49% of jobs in the economy. Other sectors contributing to Panama’s employment are the industrial sector with 18.8% of the workforce and the agricultural sector with 13.71%. Let's look at the GDP distribution among various sectors. The services sector accounts for 64.97% of the GDP, and the manufacturing sector accounts for 29.25% of the GDP. The agricultural sector accounts for 2.13% of the GDP.
Total population – 4.28 million
GDP – US $66.79 billion (FY20)
As per the reports of Global Edge, the Panamanian economy’s GDP growth rate in 2019 was 3.006%. The global ranking of Panama according to GDP is 80 out of 196 countries. The inflation% had declined from 0.76% in 2018 to -0.36% in 2019. There was a slight decline in manufacturing growth in 2019. The main industries contributing to the Panamanian economy are construction, cement, brewing, sugar milling, and other construction materials. The GDP of Panama has grown to a valuation of US $66.79 billion at present.
Panama’s economy is ranked 3rd in Latin America. Panama’s economy grew by 3% in 2019, but with the COVID-19 pandemic, the Economic Commission for Latin America and the Caribbean (ECLAC) had forecasted that the economy could contract by 6.5% in the coming one-two years. Santander Trade Markets reported that the Panamanian economy faced a decline of 17.9% in GDP, mostly due to the COVID-19 impact on the market in 2020. The IMF has predicted that the fiscal deficit will also increase due to the pandemic. The IMF has predicted that Panama can be expected to recover in the coming 2021-2022 years.
A brief glimpse of the industries in Panama
- The main industries in Panama are mining, timber, and agricultural industries. Agriculture is one of the major industries in the country. Approximately 30% of the land is utilized for farming in Panama. This sector accounts for 13.71% of employment and contributes around 2.13% to the GDP. The recent natural disasters in Panama, including the hurricane Eta, tropical storms, and the COVID-19, have decreased the overall economic activity in the agricultural sector.
- Manufacturing industries in the Panamanian economy need to be more developed. Logging is one of the biggest industries in the country. Other industries include the clothing industry, printing, furniture, dairy, petroleum products, chemical, paper, sugar refining, etc. The mining industry is huge in Panama as the country has large ore reserves, including gold, iron, manganese, and copper. Panama is home to one of the largest copper reserves in the world. The industrial sector accounts for 18.8% of the total workforce and 29.25% of the GDP in Panama.
- The service industry is the biggest contributor to Panama’s GDP. The transport sector is the most important service industry in the country – the Panama Canal accounts for a large portion of the revenue source. Other service industries are – banking, insurance, logistics, and tourism. The recent pandemic has also led to a slight decline in the economic activities in transportation and tourism.
Cost of living in Panama
Panama has a moderate cost of living in the world. According to Numbeo, the cost of living in Panama is approximately 24% lower than the United States’ cost of living. The average cost of living for an individual in Panama is around the US $697.99 without rent. Panama City is the most expensive city in Panama. Other famous cities in Panama are Boquete, Bocas del Toro Province, Anton Valley, David, Chitre, etc.
Cost of Renting
The cost of renting in Panama depends on the house's location and the size of the house on rent. The bigger the size of the house, the more rent will be. The monthly rent of a 1-bedroom apartment in an upmarket area can range around US $400 – 1200, and the monthly rent of 1-bedroom apartments in normal areas can range around US $250 – 700. The rent also varies according to the number of facilities you have subscribed to.
Cost of living depending upon your location
Top skills in Panama
Panama is the 62nd freest economy in the world which has an asymmetrical structure with the service sector at the top, followed by the industrial and agriculture sectors. With the domination of the service sector in the Panamanian economy, there has been a rise in the demand for technical and communication skills, especially in the transportation, financial, and IT industries. Individuals with technical knowledge and soft skills in the financial sector and IT industries are being hired as bankers, sales associates, HR managers, etc. Farmers in the agricultural sector are mostly family farmers. Teachers and professors are also being hired for educational institutions. Drivers and engineers are in high demand in the transportation sector. With the pandemic, researchers and doctors are also in demand.
Major skills and areas which have witnessed a recent growth rate
- Transportation Sector
- IT Sector
- Business Sector
- Banking Sector
- Health Sector
- Real Estate Sector
Top skills city-wise occupation-wise
Panama City is the capital of Panama and provides the greatest number of job opportunities to people in Panama. Other cities that are best for living and working in Panama are Bocas del Toro, Taboga Island, Boquete, etc.
The table below highlights the average salaries that are offered to employees in Panama for top 15 in-demand jobs: -
Employment laws in Panama
According to the Panamanian employment laws, all salaried professionals and workers are entitled to the following benefits: -
- The daytime employees are supposed to work between 6 AM – 6 PM
- The night shift employees can work between 6 PM – 6 AM.
- The principle of equal pay for equal work is followed.
- If an employee overworks, they should be compensated for the extra work.
- The salary for the night shift is more than the day shift.
Laws against sexual harassment in the workplace and other types of harassment have also been framed to protect employees.
How Can Skuad Help You with Hiring in Panama?
In order to expand your business activities, your primary focus should not be on conducting hiring processes but on strategizing for the growth path. This will allow you to channelize your energies in more productive avenues. By utilizing Skuad’s solution, you can manage your entire hiring process to offer you considerable savings of time and money. Connect with Skuad to know more.