Capital City: Panama
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Economic trends

Panama's economy is based primarily on a well-developed services sector that accounts for nearly 80% of GDP. Services mainly include the Panama Canal, banking, the Colon Free Zone, insurance, and container ports. Certain sectors such as agriculture, manufacturing and building & construction have been declining for several years, resulting into deterioration of the social climate. The GDP growth rate is over 8% since 2006. Unemployment (nearly 15% of the active population), poverty (40% of the population live below poverty line), and corruption are weakening the country. In recent years the country has become a nexus for the shipment of illegal drugs from Colombia to the USA, as well as a centre for drug-related financial transactions.

Main branches of industry

Agriculture accounts for almost 8% of the GDP and employs 20% of the active population. The main crops are bananas, coffee and sugar. Panama has limited natural resources; copper being the only commodity that is exported. The industrial sector is modest; it contributes only 17% to the GDP. The main industrial activities rely on food processing, sugar refining, apparel manufacturing, and dairy products. Services sector is the real driving force of the country's economy. The Colón Free Zone, established in 1953, is a centre for foreign investment in manufacturing. Panama Canal (contributes 12% to the GDP) is continuing to generate more and more revenue because of the rise in maritime transport. It has also led to a fast development of the Panamanian banking sector. Panama holds the largest merchant navy fleet in the world.

International trade

Panama is largely an export-oriented country. Colon free zone which is the second largest free-trade zone in the world after Hong Kong, demonstrates the country's openness to foreign trade. The share of foreign trade in country’s GDP is more than 125%. The top three export partners of Panama are: the USA, Spain and Sweden. The commodities mainly exported are fish & sea products, edible fruits & vegetables, sugar and meat. The top three import partners are: the USA, Costa Rica and Japan. Panama mainly imports mineral fuels & oils, vehicles, machinery, electric & electronic equipment, and pharmaceutical products.