Living costs in Panama are obviously a major element of any decision to relocate to the country and should be investigated in detail before making a decision. This is a country which has had its fair share of controversy but is actually deemed to have one of the fastest growing economies in the world with experts believing it is well-positioned for future growth. So what can you expect regarding the cost of living in Panama?
Thankfully the economy of Panama has remained fairly stable over the last few years with inflation now under control and no longer a major threat to the cost of living. However, with economic prosperity comes an increase in the general standard of living and also an increase in the cost of living. If, as expected, economic growth continues at the same pace we have seen over the last couple of years then an increase in GDP and general income for the Panama population should more than offset any potential increased cost of living.
The Panama economy
As you might expect, the Panama economy is dominated by the Panama Canal and the strong relationship with the US authorities. The Panama Canal is the only major trade route between the Caribbean Sea and the Pacific Ocean thereby making it effectively invaluable regarding international and worldwide trade. As a consequence, the Panama economy is literally based upon and around the Panama Canal although we have seen the introduction of a variety of new economic sectors which include banking, commerce, tourism, trading, private businesses as well as an ever growing tourist industry.
Panama property sector
As you might expect from an economy which has been growing since the turn of the century, the Panama property sector has shown significant growth over last 10 years. However, many experts believe that we may well be in for a period of relative consolidation with a number of new developments, which began a few years ago, now being “mothballed “. As a consequence there is a slight balance in favor of supply as opposed to demand and property prices are expected to soften in the short to medium term.
Living costs in Panama
While Panama is one of the smallest countries in Central America it does appear to punch above its weight on the international scene and as such is one of the more expensive countries in central/southern America in which to live. However, compared to the likes of the UK and the US the cost of living in Panama is still relatively cheap and has many attractions for those looking to move from overseas.
Taxes in Panama
The taxation system in Panama is one of the highest in central/south America but compared to the UK and the US it is again very competitive. The authorities have also taken a major decision to attract foreign investors, foreign visitors and expats to the region which is definitely starting to pay dividends.
Conclusion
While the cost of living in Panama may well be one of the highest in the Americas there is no doubt that the economy is well-positioned for the future and the relative cost of living against income and the standard of living is very attractive indeed.
