Overview: The economy is in a deepening recession, with GDP dropping an estimated 15-20% in 1988. Declines of 20-50% have occurred in the construction, manufacturing, tourism, fishing, retail sales, and government sectors. Political instability and the erosion of business confidence are the principal causes of the collapse. The recession was aggravated by a liquidity crisis in the banking sector after President Delvalle was ousted by Defense Chief Noriega on 26 February 1988, precipitating a depositor run on the banks. US economic sanctions, including elimination of sugar quotas and a trade embargo, also contributed to Panama's economic decay in 1988. Unemployment is at the 23% level, and underemployment may affect over a third of the work force.

GDP: $4.2 billion, per capita $1,830; real growth rate - 15.0% to - 20% (1988 est.)

Inflation rate (consumer prices): 2.0% (1988)

Unemployment rate: 23% (1988 est.)

Budget: revenues $600 million; expenditures $800 million, including capital expenditures of NA (1988 est.)

Exports: $298 million (f.o.b., 1988 est.); @m5commodities--bananas 28%, shrimp 17%, coffee 5%, sugar, clothing; @m5partners--US 66%, Central America and Caribbean, EC (1988 est.)

Imports: $700.5 million (c.i.f., 1988 est.); @m5commodities--capital goods, petroleum products, consumer goods, foodstuffs, chemicals; @m5partners--US 43%, Central America and Caribbean, Mexico, Japan, EC, Venezuela (1988 est.)

External debt: $5.7 billion (December 1988 est.)

Industrial production: growth rate - 23% (1988 est.)

Electricity: 1,105,000 kW capacity; 3,374 million kWh produced, 1,450 kWh per capita (1988)

Industries: manufacturing and construction activities, petroleum refining, brewing, cement and other construction material, sugar mills, paper products

Agriculture: cash crops--bananas, sugarcane, coffee; food crops--rice, corn, beans

Aid: US commitments, including Ex-Im (FY70-87), $514 million; Western (non-US) countries, ODA and OOF bilateral commitments (1970-86), $536 million; Communist countries (1970-87), $4 million

Currency: balboa (plural--balboas); 1 balboa (B) = 100 centesimos

Exchange rates: balboas (B) per US$1--1.000 (fixed rate)

Fiscal year: calendar year

NOTE: The information regarding Panama on this page is re-published from the 1989 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Panama Economy 1989 information contained here. All suggestions for corrections of any errors about Panama Economy 1989 should be addressed to the CIA.