The Panama Canal closed the 2018 fiscal year with a historic tonnage record, an increase of 9.5% over the previous year. This significantly exceeded the original forecasts for 2018. The revenues from the Panama Canal and the national currency, the USD, make the big difference between Panama and most other emerging market countries in terms of a country’s economic stability.
The expansion of the Panama Canal, which was completed in 2016, is paying off. The increase was driven in particular by liquid gas tankers (LNG & LPG), container ships, chemical tankers and vehicle transporters. LNG tankers could hardly use the original Panama Canal due to the draught of the ships. The following overview shows the sub-segments in the time before the extension of the canal (Panamax) and currently (Neopanamax).
62.8 percent of the cargo that crosses the canal comes from the United States or is destined for the United States. The main countries using the interoceanic route were: United States, China, Mexico, Chile and Japan. Panama is benefiting from economic growth in the USA. At the same time, however, Panama would also suffer from an intensified trade war between the USA and China.
The income from the Panama Canal is between USD 2 – 2.5 billion annually, which is a stable and high income for a small country like Panama with 4 million inhabitants. The country’s national debt, measured as a percentage of GDP, is around 39%, partly because of the revenues from the Panama Canal. This is low by international standards (EU 81%, USA 108%, Japan 235%).
The booming Panama Canal is an important component of the economy and promotes prosperity and the growing infrastructure in the country. These are important elements for the attractiveness of the investment location and the real estate in Panama.