You are here :: Panama Real Estate » Real-estate-investments » Panama-trade-deficit

Due to the high cost of oil and other raw materials Panama’s trade deficit reached $3.3 Billion USD at the end of September 2008. Panama’s trade deficit amounted to over 5 percent of its gross domestic product, up from 1.9 percent at the end of 2007. It remains to be seen how the reduced cost of oil and construction materials will affect Panama’s trade deficit. Panama has the highest per capita foreign investment in Latin America and a thriving economy despite to world economic slump. It is likely that Panama’s trade deficit will continue for several years.

Panama does not have a developed export economy. Money comes into Panama from tourism, Panama Canal related business, and the highest foreign investment per capita in Latin America. Panama’s construction boom requires imported materials as do much of the infrastructure improvements underway. Both the construction projects which will often sell to foreigners and the improvements in airports, ports, and telecommunications will draw more money to Panama. Thus we can look at Panama’s current trade deficit as investment.

Investment in Panama

Despite the world economic slump Panama expects to see its economy grow between 4.5 and 6.2 percent in 2009. Local economists expect a growth rate of 6.2 percent while the UN’s Economic Commission for Latin America (ECLAC) is predicting 4.5 percent growth in 2009. Either way Panama economy is prospering and will weather the storm quite well. Depending upon whether or not there develops a significant flight of capital to Panama because of its continuing prosperity Panama may even succeed more in the years to come.

Investment in tourism related businesses, residential real estate, commercial real estate, and business in general in Panama has done well in the first decade of the century. As Panama has emerged from the shadow of US management of the Panama Canal foreign investment has flowed in. Panama has wisely invested in its roads, ports, airports, and more. Investment in the Panama Canal Expansion will potentially double trade passing through Panama as much larger, “cape size,” vessels will fit the new Panama Canal locks now in the bidding process.

The Panama residential real estate market has appreciated substantially over the last decade to the point where a “bubble” was in question. In fact, the high end of the Panama residential real estate market has flattened out due to credit problems in North America. Panama is pursuing tourism and home buyers in Great Britain and Europe in an effort to broaden its base of home buyers.

Investment in Panama commercial real estate has done especially well as Panama’s business sector has prospered. Investment in commercial real estate in Panama allows one to experience the same appreciation of real estate values as in the residential real estate market and collect lease payments from successful commercial renters. It is of note that commercial real estate investment in Panama does not have to deal with the rent controls that are present in lower cost residential apartments.

Come to see us at ABPanama for our take on real estate investment opportunities in an economy that is thriving under current world circumstances. We have over twenty-three years experience managing real estate portfolios and can help you make an investment that will pay substantial rewards for years to come.