Foreign Direct Investment In Panama

According to preliminary estimates released by Panama‘s Comptroller General’s office, foreign direct investment (FDI) in this country totaled US$609 million (2.3% of GDP) in the first quarter of this year, up 56.4% from US$389 million (1.6% of GDP) in the first quarter of 2009.

The sharp increase was driven by reinvested profits, which more than doubled to US$387 million during the three-month period, led by greater investments in Colon Free Zone enterprises.

The main beneficiaries of all this foreign investment have been the hotel, telecommunications, agriculture, livestock, and real estate sectors.

Panama’s FDI fell 26.1% year-on-year to US$1.8 billion in 2009 amid the global recession, matching the 25% plunge the IMF has estimated for all emerging markets. As the global economy recovers from its slump, however, and financial flows to developing countries strengthen, the Martinelli administration expects FDI inflows to Panama to surpass US$2 billion (7.6% of GDP) in 2010.

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