Growth Forecasts for Panama are Raised to More than 5% in 2026 from UBS.
Since 2024, private sector deposits have increased by approximately $5 billion to $6 billion annually, equivalent to about 5% of GDP. The Swiss investment bank UBS highlights that Panama has entered a new economic stage, with projected growth of 5% in 2026, higher Canal revenues and a significant improvement in its fiscal accounts.
Panama is going through a new economic phase marked by a recovery of confidence, according to an analysis by the Swiss bank UBS. The financial firm, based in Zurich, Switzerland, notes that the main factors of uncertainty that dominated the last two years are beginning to dissipate, as the country resumes its growth rate.
UBS estimates that Panama’s real gross domestic product (GDP) will grow by around 5% in 2026, driven by increased household consumption, the recovery of the construction sector, tourism and activities related to the Panama Canal. The firm highlights that first-half growth reached 5.5%, the strongest performance among major Latin American economies during that period.
The report also highlights the improvement in fiscal accounts. UBS notes that the adjustment made by the authorities has been “one of the firmest and deepest in recent years among the economies of the Americas,” with a reduction in the fiscal deficit and a more stable debt trajectory.
In financial matters, the firm believes that Panama maintains a favorable position due to the strength of its dollarized system and the increase in private deposits. Since 2024, private sector deposits have increased by approximately $5 billion to $6 billion annually, equivalent to about 5% of GDP, although UBS warns that this liquidity has not yet translated into greater local credit growth.
UBS notes that although President José Raúl Mulino’s popularity has declined significantly, it acknowledges that the administration has made progress on key reforms, improved fiscal performance, and maintained strong relations with the United States, while the Canal continues to be a fundamental support for the Panamanian economy.
