Panama Construction Articles & Analysis

Chapter | Construction & Real Estate from The Report: Panama 2015

Buoyed by a combination of factors, including the country’s prime geographic location, sustained economic growth and the influx of foreign investment in recent years, Panama’s real estate market has seen unprecedented growth since 2006. Today it is a key component of Panama’s economy, amounting to $4.6bn or 12% of GDP in 2014. Though fast growth has led the cost of land to skyrocket, sometimes...

Despite slower GDP growth of 6.2% in 2014, according to the Ministry of Economy and Finance, Panama remains one of Latin America’s fastest growing economies, a trend set to continue in coming years with the IMF forecasting average annual growth of around 6.5% over the next five years.

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Industry has not traditionally been among the largest sectors of Panama’s economy, which is based largely on services – especially transport and logistics, which make up more than one-fifth of GDP – but recently the sector has begun to benefit from the development of value-added services. A sizeable number of companies have in recent years begun trying to leverage Panama...

For many years Panama’s real estate market has been one of the fastest growing in Central America. This growth has been driven by a combination of factors, including the country’s prime geographic location; sustained economic growth, which has averaged more than 8% over the past decade; and the influx of foreign investment seen in recent years. The emergence of a middle...

How has the sector been affected by the slowing issuance of construction permits?

Representing $5.1bn and 14% of the nation’s growing GDP, construction is a major component of Panama’s economy. From infrastructure to commercial and residential building, all subsectors have seen important advances in the past year. According to the Panama Construction Chamber (Cámara Panameña de la Construcción, CAPAC), the sector saw 14% growth in 2013-14 and is set...

As one of the main challenges in Panama’s construction sector despite the rapid growth of recent years, many developers point to the process of issuing building permits, which has been fraught with delays and rising prices. Permit costs have risen significantly in some municipalities, such as San Miguelito, which raised them by 40% in 2015. The reasons given for such...

Public debt rose to $18.23bn at the close of 2014, up by 16% year-on-year. To what extent has overspending on infrastructure contributed to this? How can cost overruns be avoided in the future?