Panama

World Book Index

Introduction

Panama, a country rich in history and cultural diversity, was first explored and settled by the Spanish in the 16th century. It gained independence from Spain in 1821 and subsequently joined a union with Colombia, Ecuador, and Venezuela known as the Republic of Gran Colombia. Following the dissolution of this union in 1830, Panama remained a part of Colombia until it seceded with the support of the United States in 1903. This pivotal moment led to the signing of a treaty with the US, which facilitated the construction of the Panama Canal, a critical artery for global maritime trade.

Neighboring countries

Colombia - Costa Rica

Geography

Area
Total: 75,420 sq km
Land: 74,340 sq km
Water: 1,080 sq km

Panama is characterized by its tropical maritime climate, which is hot, humid, and often cloudy. The country experiences a prolonged rainy season from May to January, followed by a short dry season from January to May. Its diverse geography includes mountainous regions, coastal plains, and a rich array of natural resources, such as copper, mahogany forests, shrimp, and hydropower, which play a significant role in its economy and environmental landscape.

People and Society

Population
Total: 4,470,241 (2024 estimated)

Panama's population is a tapestry of ethnic diversity, with Mestizos (mixed Indigenous and White) making up 65% of the demographic. Indigenous groups account for 12.3%, including Ngabe (7.6%), Kuna (2.4%), Embera (0.9%), Bugle (0.8%), and others. Additionally, 9.2% of the population identifies as Black or of African descent, while Mulattos and Whites represent 6.8% and 6.7%, respectively (2010 estimated). The official language is Spanish, but the country is also home to a variety of Indigenous languages and English-based Creole. The religious landscape is predominantly Evangelical (55%) and Roman Catholic (33.4%), with a notable percentage of the population identifying as non-religious (10.1%) (2023 estimated). The population growth rate stands at 1.48% (2024 estimated), reflecting a dynamic and evolving society.

Government

Government type
Presidential republic

Capital
Name: Panama City

The executive branch is led by President José Raúl MULINO Quintero, who has been in office since 1 July 2024. Panama maintains diplomatic relations with the United States, represented by Ambassador Kevin Marino CABRERA since 5 May 2025, while Ambassador José Miguel ALEMÁN HEALY has served as the chief of mission from Panama to the US since 18 September 2024.

Economy

Economic overview
Panama boasts an upper middle-income economy, strategically positioned in Central America. The country has seen a significant increase in trade with China and utilizes the US dollar as its currency. The expansion of the Panama Canal has spurred broader infrastructure investments, further enhancing the services sector, which dominates the economy. However, Panama has also faced challenges, historically serving as a hub for money laundering and illegal drug trafficking.

Real GDP (purchasing power parity)
$164.484 billion (2024 estimated)
$159.908 billion (2023 estimated)
$148.891 billion (2022 estimated)

Real GDP per capita
$36,400 (2024 estimated)
$35,900 (2023 estimated)
$33,800 (2022 estimated)

Exports
$37.376 billion (2024 estimated)
$37.905 billion (2023 estimated)
$35.717 billion (2022 estimated)

Exports - partners
China 25%, Japan 10%, USA 6%, Thailand 5%, Costa Rica 5% (2023)

Exports - commodities
Copper ore, ships, refined petroleum, bananas, fish (2023)

Imports
$30.887 billion (2024 estimated)
$35.927 billion (2023 estimated)
$32.646 billion (2022 estimated)

Imports - partners
USA 15%, Colombia 13%, China 13%, Ecuador 13%, Japan 11% (2023)

Imports - commodities
Crude petroleum, ships, refined petroleum, nitrogen compounds, cars (2023)

Human Development Index

The country's Human Development Index (HDI) is 0.839 , ranking it 59th out of 193 countries tested. (more information)

World Happiness Report

The World Happiness Report ranked the country 25th out of 158 countries tested with a score of 6.678. (more information)