Country Profile: Panama

Panama is a strategically located Central American country bordered by both the Caribbean Sea and the North Pacific Ocean, making it a vital link between North and South America. The population of approximately 4.47 million is predominantly urban, centered around the capital, Panama City, and the Panama Canal, which has driven significant economic activities. As an upper middle-income nation, Panama's economy relies heavily on its services sector, particularly shipping and banking, while also grappling with issues such as drug trafficking and money laundering. The country operates as a presidential republic with a multi-party system, and it has a history marked by significant U.S. influence due to the canal treaty.

Geography

Panama's unique geography features a varied landscape that includes rugged mountains, coastal plains, and vast rainforests, contributing to its rich biodiversity. The country has a total area of 75,420 sq km, making it slightly smaller than South Carolina, with a coastline of 2,490 km. It experiences a tropical maritime climate characterized by a prolonged rainy season from May to January, and its highest point is Volcan Baru at 3,475 m.

• 687 km of land borders with Colombia and Costa Rica.
• 56.5% of land covered by forests (2022).
• Dominant natural resources include copper, mahogany forests, and hydropower.

People and Society

With an estimated population of 4,470,241 in 2024, Panama is diverse, comprising primarily Mestizo (65%) and Indigenous groups (12.3%). The official language is Spanish, and various Indigenous languages are spoken, alongside forms of English Creole. The country has a relatively young population with a median age of 31.5 years and a birth rate of 17.4 births per 1,000 people.

• 69.5% of the population is urban (2023).
• Life expectancy is 79.2 years (2024).
• The literacy rate stands at 96% (2019).

Economy

Panama has an upper middle-income economy that heavily relies on the services sector, especially linked to the Panama Canal. The economy is increasingly integrated with Chinese trade, and in 2024, the GDP is estimated at $164.484 billion (PPP). The country has experienced significant growth in recent years, but issues like money laundering persist.

• 2.9% projected GDP growth rate for 2024.
• Unemployment rate remains at 6.6% for 2024.
• $86.26 billion estimated GDP at official exchange rates for 2024.

Government

The Republic of Panama is governed as a presidential republic with a legal system based on civil law. The current president, José Raúl Mulino Quintero, was elected in May 2024. The political structure includes a unicameral National Assembly and an independent judiciary, providing a framework for democratic governance.

• 10 provinces and 4 indigenous regions.
• Citizens can vote at 18 years of age.
• Last election was held on 5 May 2024, with the next expected in May 2029.

Military and Security

Panama has no regular military forces; instead, it relies on the National Police and other security services for law enforcement and border control. The Ministry of Public Security oversees these forces, which number approximately 30,000 personnel. The country's defense focuses primarily on counter-narcotics and border security tasks.

• Military expenditures are estimated at 1.1% of GDP for 2024.
• The National Police includes specialized units for counterterrorism and counternarcotics.

Energy

Energy consumption in Panama is largely dominated by hydroelectric sources, representing 47.8% of total installed capacity as of 2023. The country boasts extensive electricity access, achieving 95% electrification for the population.

• Total installed generating capacity is 4.485 million kW (2023).
• The country consumes 11.777 billion kWh of electricity (2023).

Environment

Panama faces several environmental challenges, including deforestation, water pollution, and land degradation, notably in areas surrounding the Panama Canal. The country is a participant in numerous international environmental agreements aimed at addressing these issues.

• 69.5% of the population living in urban areas (2023) increases pressure on urban environments.
• Total renewable water resources amount to 139.3 billion cubic meters (2020).

Transportation

Panama has a well-developed transportation network, including a merchant marine fleet that ranks among the largest in the world. The country has 12 ports that facilitate transit and shipping through the canal.

• 77 airports as of 2025.
• Approximately 77 km of standard gauge railways.

Communications

Panama has a growing telecommunications sector, with a significant number of mobile subscriptions and internet accessibility. Currently, 78% of the population uses the internet, reflecting advancements in communications infrastructure.

• 811,000 fixed-line telephone subscriptions (2023).
• Mobile cellular subscriptions total 6.98 million (2023).

Key Metrics

Metric	Value	Note
Population	4,470,241 (2024 est.)
Area	75,420 sq km
GDP (PPP)	$164.484 billion (2024)
Unemployment Rate	6.6% (2024 est.)
Life Expectancy (at birth)	79.2 years (2024 est.)
Birth Rate	17.4 births/1,000	2024 estimate
Urban Population	69.5% (2023)
Electricity Access	95% (2022 est.)
Total Renewable Water Resources	139.3 billion m³	2020 estimate
Literacy Rate	96% (2019 est.)