IMF Working Papers

Panama’s Growth Prospects: Determinants and Sectoral Perspectives

By Kimberly Beaton, Metodij Hadzi-Vaskov

July 7, 2017

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Kimberly Beaton, and Metodij Hadzi-Vaskov. Panama’s Growth Prospects: Determinants and Sectoral Perspectives, (USA: International Monetary Fund, 2017) accessed February 16, 2025

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper estimates medium-term potential growth for a country undergoing significant structural and secular changes. Our forward-looking framework, incorporating three analytical approaches for examining economic prospects, constitutes an important complement to typical backward-looking methods that filter or extrapolate historical data. In particular, the opening of the expanded Panama Canal in 2016 highlights significant structural changes underway in the Panamanian economy. We first analyze growth determinants and find that Panama is well-placed to maintain its business model, with improvements in education and governance important to support growth. Second, the current pipeline of investment projects can help sustain investment-led growth, although at a more moderate pace. Third, further development of the logistics and tourism sectors holds promise to further build on Panama’s comparative advantage.

Subject: Economic sectors, Expenditure, Infrastructure, National accounts, Private investment, Public investment and public-private partnerships (PPP), Tourism, Transportation

Keywords: Caribbean, Case Study, Central America, Economy, Energy infrastructure, Global, Growth determinant, Growth Determinants, Growth prospect, Infrastructure, Investment, Investment, Investment project, Logistics, Panama, Potential Growth, Potential Output, Private investment, Public investment and public-private partnerships (PPP), South America, Tocumen airport, Tourism, Tourism product, Transportation, WP

Publication Details

  • Pages:

    30

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2017/150

  • Stock No:

    WPIEA2017150

  • ISBN:

    9781484307861

  • ISSN:

    1018-5941