Panama Economy—overview: Because of its key geographic location Panama's economy is service-based heavily weighted toward banking commerce and tourism. Since taking office in 1994 President PEREZ BALLADARES has advanced an economic reform program designed to liberalize the trade regime attract foreign investment privatize state-owned enterprises institute fiscal reform and encourage job creation through labor code reform. The government privatized its two remaining ports along the Panama Canal in 1997 and approved the sale of the railroad in early 1998. It also plans to sell other assets including the electric company. Panama joined the World Trade Organization (WTrO) and approved a tariff reduction that will give the country the lowest average tariff rates in Latin America. A banking reform law was approved by the legislature in early 1998 and will take effect in June. After two years of near stagnation the reforms are beginning to take root; GDP grew by 3.6% in 1997 and is expected to grow by more than 5% in 1998. The most important sectors driving growth have been the Panama Canal and the shipping and port activities. The Colon Free Zone also rebounded from a slow year in 1996. GDP: purchasing power parity—$18 billion (1997 est.) GDP—real growth rate: 3.6% (1997 est.) GDP—per capita: purchasing power parity—$6 700 (1997 est.) GDP—composition by sector: agriculture: 8% industry: 18% services: 74% (1997 est.) Inflation rate—consumer price index: 1.2% (1997) Labor force: total: 1.044 million (1997 est.) by occupation: government and community services 31.8% agriculture hunting and fishing 26.8% commerce restaurants and hotels 16.4% manufacturing and mining 9.4% construction 3.2% transportation and communications 6.2% finance insurance and real estate 4.3% note: shortage of skilled labor but an oversupply of unskilled labor Unemployment rate: 13.1% (1997 est.) Budget: revenues: $2.4 billion expenditures: $2.4 billion including capital expenditures of $341 million (1997 est.) Industries: construction petroleum refining brewing cement and other construction materials sugar milling Industrial production growth rate: 0.4% (1995 est.) Electricity—capacity: 957 million kW (1995) Electricity—production: 3.6 billion kWh (1995) Electricity—consumption per capita: 1 355 kWh (1995) Agriculture—products: bananas rice corn coffee sugarcane vegetables; livestock; fishing (shrimp) Exports: total value: $592 million (f.o.b. 1997 est.) commodities: bananas 43% shrimp 11% sugar 4% clothing 5% coffee 2% partners: US 37% EU Central America and Caribbean Imports: total value: $2.95 billion (c.i.f. 1997 est.) commodities: capital goods 21% crude oil 11% foodstuffs 9% consumer goods chemicals partners: US 48% EU Central America and Caribbean Japan Debt—external: $7.26 billion (1996 est.) Economic aid: recipient: NA Currency: 1 balboa (B) = 100 centesimos Exchange rates: balboas (B) per US$1—1.000 (fixed rate) Fiscal year: calendar year
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