Multi-Dimensional Review of Panama
Volume 1: Initial Assessment
Since the beginning of the 21st century, Panama has exhibited remarkable economic growth and has reduced the gap in terms of income per capita with high-income countries. Social progress has also been achieved, mainly through the reduction of poverty and advances in some well-being dimensions. However, challenges remain with regard to overcoming the so-called middle-income trap and consolidating the middle-class. This first volume of the Multi-dimensional Country Review of Panama identifies the main barriers to further inclusive development. It highlights that promoting equitable, inclusive and sustainable economic growth and improving the well-being of all citizens should be at the core of Panama’s development strategies.
Executive summary
OECD Development Centre
Panama has experienced considerable socio-economic progress and improved well-being in the past decades. GDP per capita has grown considerably since 2006 at a 4.5% annual average, faster than the average of 2.8% in Latin America and Caribbean and narrowing the gap with developed countries in terms of GDP per capita. If Panama sustains this growth rate, it would become a high-income country by 2021. In addition, Panama cut its level of poverty, defined as the share of people living on less than USD 3.10 purchasing power parity (PPP) per day, in half to 8% between 2004 and 2014. Over the same decade, extreme poverty, or those living on less than USD 1.90 PPP per day, decreased by two-thirds, encompassing 3% of the population. Furthermore, Panama performs relatively well in most OECD well-being dimensions compared to countries at the same level of development.