The Republic of Panama is not only a resplendent country mystically enchanted with unique culture and stunning landscape, but it additionally a country with a sound economic substructure. With the recent increase in efforts to amend the Panamanian way of life, there seems to be a very promising future for all Panamanians as well as others who have ties to this fascinating country. Panama has always been economically sound, generally verbalizing, but with all of these recent amendments, it seems as if Panama is only moving forward from here. The country has been a trading point for quite some time now, mostly because of the Panama Canal, but with recent investments and integrations, Panama has the potential to grow into an immense trading…show more content…
Economic Expansion and Formation
In the 1980’s, Panama had political instability, including slow economic growth, large public debt and fiscal deficits. It was running under a dictatorship of the military government and they looked to gain control over the Panama Canal, which the United States had control over. The U.S helped end the dictatorship of the military government and in 1999, they completed a transfer, which gave Panama complete control of the Panama Canal. Also, structural adjustment packages were adopted in exchange for assistance from other international institutions, in the hopes of increasing competitiveness, financially stability, and diversification. Alongside, additional structural reforms, including market liberalization, privatization of state-owned-enterprises and fiscal reform were implemented allowing for increased competitiveness and financial stabile. This also helped secure international investment and provide new financial sources, improving the economy.
Panamas government has promoted economic growth and has done so over the last decade through supporting free trade and open market policies. “Panama is a small and open economy in which investment is normally well in excess of savings. In 2014 the current account deficit amounted to some $5.3bn, or 12% of GDP”. (IMF) The private sector recently experienced a downfall in December