This article is adapted from AQ’s special report on trends to watch in Latin America in 2025
Panama
PRESIDENT
José Raúl Mulino
IN OFFICE
2024-2029
President José Raúl Mulino is expected to continue prioritizing a crackdown on migration through the Darién Gap and a reform of Panama’s social security system. Last November, he submitted to Congress a bill that includes raising the retirement age by three years. The president has also pledged to “close” the Darién Gap. Shortly after taking office in July, he signed an agreement with the U.S., and in August Panama began deporting migrants on U.S.-funded flights. Following Trump’s recent threats to take back control of the Panama Canal, Mulino stated that “The canal is Panamanian and belongs to Panamanians.” Mulino intends to “revive” the canal, which has lifted restrictions following droughts in 2023-4, while pushing a $1.6 billion project to dam the Indio River to improve the canal’s water supply. Panama’s fiscal deficit reached 7% of GDP in the first three quarters of 2024, amid rising spending and falling revenues. Fitch downgraded Panama to junk status in March, and in November S&P followed suit, pushing Panama to its lowest investment grade, while Moody’s cut its outlook to negative. This year Mulino’s administration is expected to address issues related to the closure of the Cobre Panamá mine. The IMF has alerted that “significant fiscal risks” may arise from mine-related arbitration proceedings.
| Presidential approval rating | 76% |
| Population (millions) | 4.5 |
| Homicide rate (per 100,000 people) | 11.5 |
| % who say they would like to emigrate in next three years | 21% |
| Capacity to Combat Corruption Index ranking (out of 15 Latin American countries) | 6 |
TRENDS TO WATCH
- Social security reform
- Migration levels/ Darién Gap
- Trump’s rhetoric on Panama Canal
ECONOMIC INDICATORS (2025 PROJECTIONS)
| GDP (current USD, billions) | $91.7 |
| GDP (% change) | +3% |
| GDP per capita (current USD) | $20,092.1 |
| Inflation | 2% |
| Unemployment rate | 8% |
| Poverty rate (World Bank definition, see note below) | 13.3% |
| Fiscal balance (% of GDP) | -3.8% |
| FDI (2023, billions USD) | $2 |
| Remittances inflows (2023, billions USD) | $0.5 |
NOTE: Poverty rate is $6.85 in 2017 PPP. Pie chart indicates total value added of GDP by economic activity at current prices. Figures rounded to nearest decimal.
SOURCES: Presidential approval: CID Gallup (September 2024); Population, GDP and growth, inflation, unemployment: IMF World Economic Outlook (October 2024); Homicide rate: InSight Crime (2024); Emigration polling: AmericasBarometer (2023); Corruption index: AS/COA and Control Risks (2023); Trading partners: World Integrated Trade Solution (2022); GDP by economic activity: ECLAC (2023); Poverty and fiscal balance: World Bank (October 2024); FDI: UNCTAD (June 2024); Remittances: World Bank (June 2024).
