Economy—overview: Because of its key geographic location, Panama's economy is service-based, heavily weighted toward banking, commerce, and tourism. Since taking office in 1994, President PEREZ BALLADARES has advanced an economic reform program designed to liberalize the trade regime, attract foreign investment, privatize state-owned enterprises, institute fiscal reform, and encourage job creation through labor code reform. The government privatized its two remaining ports along the Panama Canal in 1997 and approved the sale of the railroad in early 1998. It also plans to sell other assets, including the electric company. Panama joined the World Trade Organization (WTrO) and approved a tariff reduction that will give the country the lowest average tariff rates in Latin America. A banking reform law was approved by the legislature in early 1998. The most important sectors driving growth have been the Panama Canal and other shipping and port activities.

GDP: purchasing power parity—$19.9 billion (1998 est.)

GDP—real growth rate: 2.7% (1998 est.)

GDP—per capita: purchasing power parity—$7,300 (1998 est.)

GDP—composition by sector:
agriculture: 8%
industry: 18%
services: 74% (1997 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: 0.5%
highest 10%: 42.5% (1991)

Inflation rate (consumer prices): 1.4% (1998)

Labor force: 1.044 million (1997 est.)
note: shortage of skilled labor, but an oversupply of unskilled labor

Labor force—by occupation: government and community services 31.8%, agriculture, hunting, and fishing 26.8%, commerce, restaurants, and hotels 16.4%, manufacturing and mining 9.4%, construction 3.2%, transportation and communications 6.2%, finance, insurance, and real estate 4.3%

Unemployment rate: 13.1% (1997 est.)

Budget:
revenues: $2.4 billion
expenditures: $2.4 billion, including capital expenditures of $341 million (1997 est.)

Industries: construction, petroleum refining, brewing, cement and other construction materials, sugar milling

Industrial production growth rate: 0.4% (1995 est.)

Electricity—production: 3.55 billion kWh (1996)

Electricity—production by source:
fossil fuel: 29.58%
hydro: 70.42%
nuclear: 0%
other: 0% (1996)

Electricity—consumption: 3.488 billion kWh (1996)

Electricity—exports: 157 million kWh (1996)

Electricity—imports: 95 million kWh (1996)

Agriculture—products: bananas, rice, corn, coffee, sugarcane, vegetables; livestock; shrimp

Exports: $6.68 billion (f.o.b., 1997)

Exports—commodities: bananas 43%, shrimp 11%, sugar 4%, clothing 5%, coffee 2%

Exports—partners: US 37%, EU, Central America and Caribbean

Imports: $7.38 billion (f.o.b., 1997)

Imports—commodities: capital goods 21%, crude oil 11%, foodstuffs 9%, consumer goods, chemicals

Imports—partners: US 48%, EU, Central America and Caribbean, Japan

Debt—external: $7.26 billion (1996 est.)

Economic aid—recipient: $197.1 million (1995)

Currency: 1 balboa (B) = 100 centesimos

Exchange rates: balboas (B) per US$1—1.000 (fixed rate)

Fiscal year: calendar year

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