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Panama growth 'off the charts'

Jaimie Kanwar

The expansion of the Panama Canal appears to be having a huge impact on the country's property market.

Since the Panamanian government announced plans to expand the Panama Canal in October 2006, Panama's economic growth has been ‘off the charts', according to David Stanley Redfern Ltd.

GDP growth has hit around 11% (year on year), and property values have been growing at a recorded and sustained 25% per year over the same period.

Though Panama is currently growing into one of the world's main financial and banking centres, Panama's dollar based economy is sustained largely by the Colon Free Trade Zone and the Canal, as well as services from the operation of the two including flagship registry and canal tolls.

The Canal is the only waterway linking the Atlantic and Pacific oceans, a massive benefit when it was created because of the number of ships being lost traversing the dangerous route via the Drake Passage and Cape Horn.

The Canal is rapidly becoming too small for today's ships, and the expansion will not only double its capacity but quadruple revenues from its operation, which, combined with operation of the Free Trade Zone already accounts for a quarter of Panama's GDP.

A spokesperson for DSR commented: "The canal expansion will add new live to Panama's economic growth, which is likely to remain strong between now and its completion, making Panama excellent for long-term property investment.

"Another benefit in Panama's property market is the fact that it is to Americans, what the Costa's are to Brits. More American's buy their retirement homes in Panama than any other country. This provides a massive market for the resale of Panama properties, to ensure that growth in property values can be cashed in".