Panama foreign investment projection
A recent report by the Ministry of Economy and Finance of the Republic of Panama confirms that the Central American country’s economy continues to lead economic growth in the region. This confirms the good performance of the country and its excellent prospects, which have been strengthened in part by the expansion of the Panama Canal, among other major infrastructure works and the constant growth of Panama foreign investment.
On this last point, an analysis of the United Nations Economic Commission for Latin America and the Caribbean showed that Panama remains the largest recipient of Foreign Direct Investment (FDI) in Central America. Revenues from FDI rose 6% in Central America totaling $11.808 million. Of these, Panama received 43%.
According to the Ministry of Economy and Finance of Panama, during the first half of 2016 the national economy received more than $3018.9 million in Foreign Direct Investment, representing an increase of 6.5% over the figure recorded in the same period of 2015. During the second quarter of this year, it amounted to $1677.5 million, which compared with $1,547.4 million dollars received in the second quarter of 2015, represents an increase of 8.4%.
In contrast to the rest of Latin America, Panama has a rate of 3.8% open unemployment, which results in full employment, while in the rest of the region the average is above 6%.
Panama’s favorable economic performance is partly due to the constant arrival of multinational companies that have established their headquarters for Latin America in the country, under the Headquarters of Multinational Enterprises (SEM in Spanish) act. So far this year, 16 new SEM companies have registered to set up their operations in Panama, eight more than those recorded in the same period of 2015.
In the medium term, the growth of the Panamanian economy for the next five years -from 2017 to 2021- projects an average annual rate of 6.3% and an estimated nominal GDP of $58.633 billion for 2017. At the end of 2021 the GDP will stand at $75.162 billion, implying an increase of $6.529 million during the five year period.
As for inflation, the MEF projected rates below 2% over the next five years, starting the cycle with 1.1% in 2017 and closing it at 1.7% in 2021.
With this projection of stability and competitiveness, Panama is currently the best investment destination in the region. A proper legal advice is essential for the incursion in this economy, as it provides a thorough analysis of all the elements related to doing business in Panama as well as information on how to take advantage of the laws that promote these actions. With our experience in corporate law, we provide the support that your business needs to be part of this remarkable business destination.
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