Panama Is #52

Panama is #52 in Economic Freedom out of 176 Countries.

Every year the Heritage Foundation, a leading U.S. nonprofit, produces the Index of Economic Freedom Report and ranks how free and open each country’s economy is.

With a score of 64.1, Panama is classified as "Moderatley free":

When it’s about soccer, every Panamanians desperately wants to be #1. We need that passion where it really counts:

Want greater income and a better quality of life?

Improve economic freedom!

Evidence clearly shows that greater economic freedom leads to higher standards of living, increased job creation, improved education and healthcare, greater prosperity, and enhanced environmental stewardship.

More About Economic Freedom

What Does Being “Moderately free” Mean for Panama?

Panama’s "Moderately Free" classification on the Index of Economic Freedom highlights a relatively open economy with strong trade, business, and financial freedoms but also reveals areas of fiscal instability and institutional challenges. For the average Panamanian, this classification means access to robust economic opportunities yet ongoing issues with government integrity and judicial effectiveness, which can affect trust in public institutions and secure investments.

What categories doES Panama DO well in?

To do well ("mostly free") a country must score 70 - 79.9. To classify as excellent ("free") a country must score 80 or higher. Panama scores relatively well in these areas (scores out of 100):

Tax Burden 85.9
Government Spending 82.6
Trade Freedom 78.4
Monetary Freedom 75.1
Investment Freedom 75.0
Business Freedom 73.6
Financial Freedom 70.0

Solutions

Panama's three worst performing categories:

Fiscal Health 21.1
Government Integrity 37.2
Judicial Effectiveness 51.2

The weakest category, Fiscal Health, scores 21.1 out of 100, reflecting high levels of public debt and budget deficits that put pressure on the national economy. This low score affects citizens by increasing the risk of higher taxes or reduced public services, which can impact economic stability. To improve fiscal health, Panama could focus on reducing debt through responsible budgeting, improving tax collection efficiency, and controlling government spending.

Government Integrity in Panama, with a score of 37.2 out of 100, points to issues with corruption and transparency within public institutions. For Panamanians, this low score means limited trust in government operations, which can discourage investment and lead to inefficient use of resources. Strengthening government integrity could involve enforcing stricter anti-corruption measures, increasing transparency in public spending, and ensuring accountability for public officials.

Judicial Effectiveness scores 51.2 out of 100, indicating moderate challenges within the legal system, particularly in terms of law enforcement and fair access to justice. This impacts citizens by making legal recourse unpredictable, which can deter both foreign and domestic investments. Improving judicial effectiveness would require targeted reforms to strengthen judicial independence, streamline case processing, and ensure that courts operate transparently to protect citizens’ rights and investments.

Panama's Economic Freedom over time:

HELP Raise Panama’s Score!