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Panama Inflation

Panama has been subsidizing fuel costs in an effort to blunt the effects of inflation. With retail costs rising 24 percent over twelve months the Torrijos administration expects to spend upwards to $40 Million USD for subsidies on electricity and gasoline. Reuters, June, 2008, notes that Panama, like other countries dependent upon imports, has been hit hard by the increasing costs of oil and food seen worldwide. An additional problem for the consumer in Panama is the boom in real estate prices and rental costs.

Reuters, June, 2008, reports that, “Panamanian President Martin Torrijos said he would boost subsidies on gasoline and electricity in a bid to prevent further price increases and stem inflation.

“Panama will spend at least $40 million in the next six months to blunt the impact of further international price increases, protecting consumers who have seen retail fuel costs rise more than 24 percent in the last 12 months, Torrijos said.”

Panama Real Estate Investment

Investment in Panama real estate has done very well over the last decade. Many North Americans have purchased second homes in Panama. A lot of North American retirees have taken advantage of Panama’s easy residency requirements to obtain resident visas. For those used to North American or European prices Panama is still an inexpensive place to live, even with recent cost of living increases.

Regarding residential real estate investment in Panama, buying condos at pre construction and selling upon completion of construction has been a good strategy up until this point. Now that the top end of the real estate market has flattened a better choice may be to have a local expert such as ABPanama help you look for investors and home owners in a credit crunch who are being forced to get out of the market.

Panama Commercial Real Estate Investment

Residential real estate on the high end in Panama is offering some great deals as home buyers from North America have to deal with credit problems back home. However, expect to see residential property values go up again as Panama’s economy carries increasing prosperity into Panama’s middle class.

Were you can look for long term growth in real estate investment returns, is in Panama commercial real estate. Panama’s economy is booming. That is what has been driving inflation in Panama along with the cost of imported food and fuel. Panama has seen its level of poverty diminish dramatically over the last years as more and more jobs have become available. A change in credit laws has empowered the small business owners in Panama who employ most of Panama’s workers.

Panama’s economy is linked to the five percent of world trade that passes through the Panama Canal. This figure may double with the increased capacity of the Panama Canal once the Panama Canal expansion is completed. Panama’s prosperity is increasingly linked to its free trade agreements with other countries throughout Latin America. Panama is investing in infrastructure improvements with a widespread road construction program as well as improvement in ports and airports. Expect to see this farsighted investment to support and propel Panama’s growth for years to come.

Investment in commercial real estate in Panama will link you to Panama’s economic growth engine. You can do business in Panama but doing business in a foreign country has a substantial learning curve. With the advice of local experts such as ABPanama you can make targeted commercial Panama real estate investments and lease to growing local businesses as you walk on one of Panama’s white sandy beaches.

With current credit problems world wide those with cash may wish to look at investment in Panama real estate. Come to talk to us at ABPanama. We have over 23 years experience managing real estate portfolios and have our eye on business throughout Panama.