Panama’s very key geographical location means that its wealth comes from a highly developed services sector that of course includes the Panama Canal, but also banking, the Colon Free Zone and tourism. Panama’s service sector takes up nearly seventy-seven percent of Panama’s GDP, which in turn has the highest growth per capita in all of Central America.
It’s important when buying real estate in Panama to know that foreign investors of all kinds are flocking to Panama, which has had a very positive effect on the Economy. Panama’s economic stability has created an excellent reputation for the country, and this concept can be carried over to real estate in Panama. It’s the banking center of Central America, and many financial institutions around the world have established themselves in the region.
One thing that has plagued the Panamanians over the years is a high unemployment rate, despite having a very well educated population. The unemployment rate was estimated to be over eleven percent in 2004, but recent indicators have shown many Panamanians are seeking to be trained with service skills and in 2005 the unemployment rate steadily decreased to about 9.8 percent.
After a study done by the World Bank, Panama’s government took an active role in improving life for people in the country. Before this, employers could only dismiss their employees during the first two years of their job, which was extended to five years after the study. It was aimed to raise the standard’s of Panama’s industries, to help it compete internationally.
Every single year the situation improves for Panama. Panama actually does not produce its own paper money and instead uses just the US dollar, and has a 1:1 exchange to their national currency the Balboa. Because Panama uses the American dollar, it has become easier for foreign investors and tourists to consider Panama as a place to vacation or to set up shop. Panama has the largest Free Zone in the western hemisphere and the second largest in the world after Hong Kong. Panama Free Zone has enjoyed great success and accounts for ten percent of the GNP.
Economic forecasters predict success for Panama because increases in tourism, construction, and international banking. Inflation has remained low in Panama over the past forty years. After coming to free trade agreements with Taiwan and El Slavador, Panama then negotiated and created free trade agreements with Canada and the United States. These free trade agreements allow for easier access to goods. Also, the expansion of the Panama Canal creates 40,000 jobs, and will double the capacity of the canal.
All these factors make purchasing real estate in Panama a very good idea. If you would like to learn more about real estate in Panama, you will find more articles on real estate in Panama throughout this site.