If you have any reservations about retiring, starting a business or opening an offshore company in Panama, the news below may be what you’ve been waiting for.
Investing in Latin American countries has been risky. There has been slow job growth, high unemployment, political upheaval and corruption and struggling economies mired in debt.
However, in recent years, Panama’s economy has been on the upswing and has launched the country into one of the top, most stable countries in Latin America.
Why Investing in Panama is a Good Idea
Last year’s Panama’s economic growth was between 5 and 5.2%. In 2017, Panama’s Ministry of Economy and Finance announced that Panama’s economic growth is expected to be even better at 5.8%. This would make it the highest rate among all Latin American economies.
The Economic Commission for Latin America and the Caribbean (ECLAC) estimates the average projected economic growth for Latin America to be 1.3%.
According to PR News Wire, this positive economic projection matches estimates put forth by the International Monetary Fund.
Such optimistic economic news comes from the strong performance in the Panamanian construction, finance, mining, public services, energy, and infrastructure.
Under the presidency of Juan Carlos Varela, Panama’s economy has been bolstered by diversified growth across many sectors, which include major infrastructure investments including the Third Bridge over the Panama Canal (a $570 million investment). There have been private sector investment projects as well including the first natural gas generation plant in Latin America (a $1.1 billion investment).
In a Reuters article, it is noted that Panama’s gross domestic product (GDP) growth will remain above the 5% threshold through 2018.
This is a direct result of the Canal expansion which will increase trade and commerce which will spill over into other sectors. The increased trade and commerce along with robust foreign direct investments will help offset Panama’s debt.
Panama’s inflation is estimated to be .7% as reported by Fitch. This low inflation rate is consistent with economic stability.
According to La Prensa, the World Bank predicts Panama’s economic growth to be 5.4%, and the ECLAC estimates it to be 5.9%.
A Mondaq article states that Panama’s stable and solid economic growth is backed “by solid and stable macroeconomic performance, which has driven the steady increase in per capita income and reflects the policies and strategic location and assets (the Panama Canal).”
The economic report rating evaluates a country’s credit quality and repayment, debt as it concerns “internal and external factors such as fiscal management, economic indicators and projections of growth and the conjunctures which directly or indirectly affect economic sectors.”
What Does This Mean for Your Investments?
Panama is becoming a popular retirement destination, a booming international business hub, a start-up mecca and a safe, lucrative place to store investments.
The country’s debt and unemployment are decreasing, its economy and GDP are growing and its government is stabilizing and becoming more transparent.
Panama is a safe and affordable place to retire with all the necessary amenities to live a long and fun life, has a thriving business sector with low tariffs, taxes, relocation and start-up incentives, a healthy and educated workforce and safe, and secure banks that offer tax-free, wealth-building investment options.
To learn more about the economic benefits of investing in Panama, contact Mata Pitti, your trusted Panamanian attorneys, today. We have provided a wide range of legal services in Panama for many years, helping hundreds of people establish a business, expand an international business, retire and establish and maximize their foreign investments.