Panama’s economy grew 5.5 per cent in the first half of 2026, with the second quarter running faster at 6.4 per cent, according to the National Statistics Institute INEC. 

The agency released the figures on Sept. 16, and The Rio Times reported them the next day.

The two figures cover different periods. The 5.5% compares January to June with the same months of 2025, while the 6.4% measures April to June against the year-earlier quarter. The Rio Times described the second-quarter pace as the strongest since 2023.

Transport, storage and mail grew 12.8%, the fastest among the large sectors. Wholesale and retail trade rose 11.6% and agriculture 9.6%. Canal toll revenue climbed 13.6% at current prices. Second-quarter output totalled US$20.07 billion at current prices, INEC said.

The canal has recovered from the drought years. It handled 9,568 high-draft transits in the first nine months of fiscal 2026, 6.3% more than a year earlier, according to Panama Canal Authority data cited by The Rio Times. That included 6,888 crossings of the Panamax locks and 2,680 of the Neopanamax locks. Drought forced Panama to ration daily crossings in 2023 and 2024.

Some sectors lagged. Information and communications contracted 1.8%. Construction grew 1.3% in the second quarter and 4.5% over the half, a soft reading in an industry that typically supports jobs.

Economist Carlos Araúz says the gains have not reached formal employment at the same pace. Panama has a large informal workforce, and The Rio Times noted the release carried no employment data. INEC also has not published methodology notes showing how much of the growth reflects prices rather than volume, and the half-year figure may be revised when third-quarter data arrives.

Most of Latin America is expanding between 1% and 3% this year, The Rio Times reported, which leaves Panama an outlier. Its dollarised economy and position on the canal set it apart from neighbours, but also tie it closely to global shipping volumes and US demand.

The third-quarter reading will show whether the second quarter was a peak or the start of a trend. Also on the watch list: canal transits through the dry season, labour market data and any decision on the closed Cobre Panamá copper mine, which The Rio Times said moved several points of GDP when it operated.

The Growth of Panama’s economy is a lesson for other Caribbean countries, particularly Jamaica. 

It is not over-reliant on one sector and has placed great stock in offering incentives to invest in the country. Its transport and logistics sector continues to be its trump card, but it has also built a strong financial services sector and made notable international trading partnerships.

Panama has focused on infrastructure projects, which have helped to stimulate economic growth. The country’s non-residential construction rate has doubled in the last decade.

Panama has one of the highest per capita incomes in Latin America and the Caribbean. Its nominal GDP per capita is around US$20,564, while its PPP GDP per capita is around $46,405

On Panama’s economic growth, the IMF wrote: ‘Panama has achieved income convergence with US standards much faster than most other Latin American countries in the last 25 years and is now the richest country in Latin America.”