The Panama Canal:  an economic impulse for the country

by PLP / February 13, 2018

Panama has positioned itself as an attractive country for national and foreign investment thanks to its privileged location and fiscal, migratory and labor incentives offered by the Special Economic Zones for the operation of companies.

One of the main advantages of Panama relies on the Panama Canal, an inter oceanic navigation route that allows maritime communication to be shortened in time and distance, thus facilitating commercial exchange.


Inaugurated on August 15, 1914, the Panama Canal and its favorable location on the Isthmus, a geographical feature between the Pacific and Atlantic Oceans that connects North America with South America, has a length of approximately 82km, resulting in new and great business opportunities. 

Ships from all over the world travel daily through the Canal; between 13 and 14 thousand ships use this means of transit every year. Around 144 sea routes cross it connecting 160 countries with destination to approximately 1,700 ports. 

According to the Administration of the Panama Canal, at the closing of the Fiscal Year of 2016, the 10 countries with the largest flow through the inter oceanic route where the following:

  • United States 
  • China
  • Chile
  • Peru
  • Japan
  • South Korea
  • Mexico
  • Colombia
  • Ecuador
  • Canada



On August 26, 2016, the Panama Canal expanded, adding a third lane that allows the transit of larger ships, positioning it as the largest inter oceanic route project since its opening in 1914, providing the shipping companies, producers and consumers with the following: 

  • Growth of the maritime trade

  • Greater cargo transport options

  • Logistics improvement

According to information provided by the Panama Canal Authority, the expansion project includes:

  • New locks, 70 feet wider and 18 feet deeper than the current ones.

  • Water savings thanks to the water re-use tanks that allow 60% of the water used in each lock to be recycled.
  • The existing locks allow the passage of ships that can transport up to 5,000 TEUs. After the expansion, Post-Panamax ships will be able to transit through the Canal, with a maximum of 13,000/14,000 TEU´s.

This expansion project doubles the Canal capacity and has a direct impact on economies of scale and international maritime trade which helps maintain the competitiveness and value of the sea route through Panama.

Ampliacion del canal.jpg


By the year 2016, the Panama Canal and ports where affected by the conditions presented by the world economy, which expanded by 2.2%, the lowest rate of growth since the global financial crisis of 2009 according to the United Nations. Factors such as the weak pace of investment, the decline in international trade growth, the slow growth in productivity, the high levels of debt in some countries and the low prices of raw materials resulted in the lowest rate of economic growth.

Despite this, the international organization estimates the economic expansion of 2.7% in 2017, and for the current year, 2018, it has a projection of 2.9%, representing an economic stabilization that will allow increasing traffic through the Panama Canal , its revenue as well as the movement of containers in the national port system.  

Evolucion del canal.jpg

Panama has become one of the main economic capitals in the world, which is why, if you plan to start or expand your industrial operations in the country, we invite you to contact our experts who will gladly accompany you in the development of that project.

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