Country Profile: Panama

Panama, a small Central American country, boasts a strategic location between the Caribbean Sea and the North Pacific Ocean, serving as a vital link in global trade through the Panama Canal. Home to a diverse population of over 4.5 million, Panama is a presidential republic with a growing economy driven primarily by the services sector, bolstered by significant infrastructure investments, including the recent expansion of the Panama Canal. Despite its economic progress, the country faces challenges such as income inequality and issues related to drug trafficking and money laundering.

Geography

Panama is located in Central America, bordered by Colombia to the southeast and Costa Rica to the west. The country covers a total area of 75,420 sq km, featuring steep, rugged mountains and coastal plains. Its most elevated point is Volcan Baru, standing at 3,475 m. The climate is tropical maritime, characterized by hot and humid conditions, with a prolonged rainy season from May to January.

2,490 km of coastline
687 km of land boundaries (339 km with Colombia, 348 km with Costa Rica)
62.3% of land area is forested (2023 est.)
29.5% of land is utilized for agriculture (2023 est.)

People and Society

As of 2025, Panama has an estimated population of 4,536,008, with a near-equitable gender distribution. The society is ethnically diverse, comprising primarily Mestizo (65%), Indigenous (12.3%), and Black or African descent (9.2%). Spanish is the official language, while various Indigenous languages and English dialects are also spoken. The predominant religions are Evangelical (55%) and Roman Catholic (33.4%).

69.5% urban population (2023)
31.7 years median age (2025 est.)
2.33 children born per woman (2025 est.)
79.2 years life expectancy at birth (2024 est.)

Economy

Panama's economy is categorized as upper-middle-income, with a strong reliance on the services sector, particularly shipping and logistics due to the Panama Canal. The economy has shown significant growth, with a 2.9% GDP growth expected in 2024, fueled by infrastructure development and increased trade with China. The country uses the US dollar, contributing to its economic stability.

$164.484 billion in real GDP (2024 est.)
$36,400 GDP per capita (2024 est.)
6.6% unemployment rate (2024 est.)
21.8% of the population below the poverty line (2021 est.)

Government

Panama is a presidential republic, with its capital in Panama City. The government operates under a civil law system, and its constitution was last amended on October 11, 1972. The president, elected for a five-year term, currently is José Raúl Mulino Quintero. The National Assembly consists of 71 seats, directly elected by the populace.

3 November 1903: Independence Day from Colombia
Voting age is set at 18 years with universal suffrage
Major political parties include the Democratic Revolutionary Party (PRD) and Realizing Goals (RM)
Next presidential election expected in May 2029

Military and Security

Panama does not maintain regular military forces, having abolished its army under the 1994 Constitution. Instead, the country relies on the Ministry of Public Security, which includes the National Police and various specialized units. The focus of these forces is on law enforcement, border security, and combating drug trafficking.

Approximately 30,000 personnel in security forces (2025)
Military expenditures account for 1.1% of GDP (2024 est.)
National Police includes special units for counterterrorism and counternarcotics efforts

Energy

Panama's electricity access is high, with 95% of the population having access as of 2022. The energy mix is dominated by hydroelectric power, accounting for 47.8% of total installed capacity. The country's energy consumption has been steadily increasing, reflecting its economic growth.

4.485 million kW installed generating capacity (2023 est.)
11.777 billion kWh electricity consumption (2023 est.)
99% electrification in urban areas (2022 est.)

Environment

Panama faces various environmental challenges, including deforestation, water pollution, and land degradation. The country is a party to several international environmental agreements aimed at combating these issues. Urban areas also struggle with air pollution.

139.304 billion cubic meters of total renewable water resources (2022 est.)
1.472 million tons of municipal solid waste generated annually (2024 est.)
14.2% of municipal solid waste recycled (2022 est.)

Transportation

Panama has a well-developed transportation system, primarily due to its geographical importance. The country has 77 airports and 12 ports, facilitating both domestic and international trade.

8,174 vessels in the merchant marine (2023)
77 km of railways (2014)
Civil aircraft registration country code is HP

Communications

The communication infrastructure in Panama is advanced, with a high rate of mobile and internet penetration. As of 2023, 78% of the population uses the internet, and there are multiple telecommunications providers.

6.98 million mobile cellular subscriptions (2023)
811,000 fixed-line subscriptions (2023)
809,000 broadband fixed subscriptions (2023)

Key Metrics

Metric	Value	Note
Population	4,536,008	2025 estimate
Area	75,420 sq km	Total area
GDP	$164.484 billion	2024 estimate
Unemployment Rate	6.6%	2024 estimate
Life Expectancy at Birth	79.2 years	2024 estimate
Urban Population	69.5%	2023 estimate
Literacy Rate	96.3%	2024 estimate
Electricity Access	95%	2022 estimate
Total Energy Consumption per Capita	78.01 million Btu/person	2023 estimate
Birth Rate	17.11 births/1,000 population	2025 estimate