Panama has a very stable economy. Due to its key location at the isthmus and the Panama Canal Panama’s economy is very western oriented and focused on services. Within the service sector, that accounts for just under 80% of total Gross Domestic Product, the emphasis lies in the banking and insurance industry, in commerce and in tourism.
Since the Panama Canal and the Canal Zone have been handed over to Panama the Canal is one of the main income sources of the country. Thanks to the employment of approximately 8000 persons in maintenance and administration the Canal additionally is a safe and consistent employer. Other branches of the service sector are the Colon Free Trade Zone, ports, health care as well as flagship registry. Due to the easy procedures and the cheap taxes a total of one fifth(!) of all ships worldwide is registered in Panama.
The industry reaches a fraction of 15% of GDP. The manufacturing of car and airplane parts, cement, adhesives, clothes as well as the beverage industry with breweries and distilleries are the main components of the industry sector.
The most important agricultural products are bananas, rice, corn, coffee, sugar cane and vegetables in addition to livestock farming and fishery, especially shrimps. Over the past few years the agricultural sector lost continually shares and reaches today a fraction of 5% of Panama’s GDP.
Panama’s currency since 1904 is the Balboa (PAB). 1 PAB is divided in 100 Centésimos. Since its implementation the Balboa has been tied to the US Dollar, which is also legal tender in Panama, at an exchange rate of 1:1. Coins up to 1 PAB/USD exist in both currencies, from 1 PAB/USD on, only US Dollar banknotes exist.