Over the past decade, Panama has been one of the fastest growing economies worldwide. Average annual growth was 7.2 percent between 2001 and 2013, more than double the regional average. The Panamanian economy grew by 6.2 percent in 2014, 5.8 percent in 2015, and for 2016 the forecast is 6.0 percent, rising slightly to 6.1 and 6.2 percent in 2017 and 2018, respectively.

In the medium term, Panama’s growth is likely to remain one of the highest in Latin America, between 6 and 6.5 percent. Public investments should also remain high, with planned construction of the second Metro line and expected additional traffic generated by the expanded Canal. Private investment should also remain strong. Prospects for high growth in the coming years are also supported by emerging opportunities for private sector-led growth in key sectors, such as transport and logistics, mining, financial services, and tourism.

Panama has made significant progress in reducing poverty in recent years. Between 2008 and 2014, a period including the global financial crisis, Panama managed to reduce poverty from 26.2 percent to 18.7 percent, and extreme poverty from 14.5 percent to 10.2 percent. This means that, of a population of about 3.9 million people, an additional 168,000 Panamanians overcame extreme poverty while close to 300,000 got out of poverty during that period.

Despite the gains on poverty reduction, sharp regional disparities remain. Poverty prevails in rural areas, mainly inhabited by indigenous people. While in urban areas extreme poverty is below 4 percent, in rural areas it is about 27 percent.

Moreover, in indigenous territories, known as “comarcas”, poverty is above 70 percent and extreme poverty above 40 percent. Lack of services, particularly access to water and sanitation, and health continues to be a constraint in the comarcas.

Panama is well positioned to continue making progress towards the twin goals, ending extreme poverty and boosting shared prosperity, thanks to both growth prospects and the Government’s renewed attention to inclusion. Yet sustaining growth over the medium to long term will require addressing some structural constraints that may become binding as the country continues developing. A number of priority structural areas, if left unaddressed, could hamper growth in the coming years. They include: infrastructure, education and skills, and the effectiveness of public institutions.

The Administration of President Juan Carlos Varela took office on July 1, 2014. The Government’s 5-year Strategic Development Plan 2015-2019 rests on two pillars of inclusion and competitiveness and includes five themes:

  • Enhancing productivity and diversifying growth
  • Enhancing quality of life
  • Strengthening human capital
  • Improving infrastructure, and
  • Improving environmental sustainability, including management. 

Last Updated: Sep 19, 2016

The World Bank Group and the government of Panama developed the Country Partnership Framework (CPF) 2015-2021 which defines the areas of Bank support in the country. In 2015, a Systematic Country Diagnostic (SCD), titled Locking in Success, was published as an evidence-based diagnostic that integrates analysis of growth, poverty, inclusion and sustainability, and as input for the CPF.

The CPF is based on three pillars for the World Bank Group engagement:

  • Supporting continued high growth
  • Ensuring inclusion and opportunities for marginalized and indigenous groups, and
  • Bolstering resilience and sustainability.

These themes are highlighted as priorities in the Government’s 2015-2019 Strategic Development Plan (SDP) and in the SCD.

The objectives of these pillars include improving access to water and sanitation, strengthening resilience to natural disasters, supporting integrated water resources management in priority areas, supporting enhanced logistics and connectivity and increasing reliability of the energy supply, improving budget management transparency, and complementing social assistance with productive inclusion.

The World Bank’s portfolio in Panama includes six active projects for a total of US$ 530.6 million. The portfolio breaks down into three investment projects worth US$155 million and focuses on water and sanitation, social protection, and public sector efficiency. There is also a US$ 9.6 million Global Environment Facility (GEF) operation, a development policy financing in fiscal management, transparency and shared prosperity worth US$ 300 million, and a US$ 66 million disaster risk management project. 

Last Updated: Sep 19, 2016


The Government launched the “Red de Oportunidades” conditional cash transfer program in 2006. The World Bank provided financial backing support for the initiative through a Social Protection Project, which covered around 11 percent of the population and exceeded the original target of 60,000 poor households with children.

With the Metro Water and Sanitation Improvement Project, more than 396,000 beneficiaries now have access to a reliable water supply and around 300,000 people have access to improved sanitation facilities.

A new financial management information system to strengthen performance-based budgeting, ISTMO (for its Spanish acronym), has been rolled out in 21 central government entities through the Enhanced Public Sector Efficiency Technical Assistance Project, and is being expanded to decentralized entities.

The Health Equity and Performance Improvement Project increased access of rural communities to quality basic health services for improving maternal and child health. More than 203,000 people in rural areas received health services from this project.

The Water Supply and Sanitation in Low-Income Communities Project increased access to sustainable water supplies and sanitation services for communities in rural and poor urban areas. Access was improved for more than 25,000 beneficiaries in rural communities and more than 15,000 people got newly constructed latrines.

Through the Basic Education project, preschool coverage of 4-5 year-old children increased from 31 to 61 percent in 2001 to 2007, while the enrollment of these children increased from around 55 thousand to nearly 93 thousand in the same period.


The Rural Productivity Project and its matching GEF grant supported the conservation of globally important biodiversity and protected forest, mountain, coastal and marine ecosystems in Panama. More than 36,000 hectares of forest are protected and nearly 3,000 small producers are involved in partnerships financed by the project.

The World Bank has also provided technical assistance to the country. The Strategy for the Enhancement of the Reverted Areas evaluated the potential social and economic developments of the 580 square miles around the Panama Canal that were returned to Panama on December 31, 1999. In addition, a maritime and air logistics strategy was prepared to support the Government’s strategic goals in this key sector.

Last Updated: Sep 19, 2016


Panama: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments