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Posted by Maria Arias on May 3, 2016
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Panama is a country of one of the fastest growing economies in Latin America over the past decade. The International Monetary Fund (IMF) expects Panama’s economy to grow this year more than 6 percent, which would rank it among that fastes expanding economies in the world. The United States is expected to grow closer to 2.6 percent in the next year. Most mature markets in Europe are growing between 1.5 and 2.5 percent. In Latin America, Brazil’s economy is flat and Mexico’s economy is expected to expand by a slight 2.6 percent.

The Panama Canal and the use of the U.S. dollar have promoted the strengthening of a globally services economy. The registry and license of the Panama flag to merchant ships is another source of economic activity. Panama also has a large logistics and storage services sector, as well as a modern banking and insurance industry.

While the Panama Canal and related activity are the main economic engines, growth is now also being driven by a modern banking and financial services sector. This sector, which features more than 80 established banking and financial institutions, including insurance, has expanded greatly thanks to the free flow of capital, adherence to international regulation standards.

Other important components of the service economy are the Colon Free Trade Zone (CFZ), which is the second largest free port in the world, and the Trans-Panama Pipeline, which allows for the transport of crude oil between the Pacific and Atlantic coasts. Panama’s aggressive infrastructure development projects will likely lead the economy to continued growth.