Panama: public finances

What is Panama's budget deficit?

Panama's non-financial public sector ran a deficit of B/.2,642 million in January to July 2026, B/.313 million less than a year earlier, according to the Ministry of Economy and Finance (11 September 2026). As a share of GDP the deficit fell from 3.27% to 2.78%. The primary deficit, which excludes interest, fell from 1.39% to 0.96% of GDP.

The government has recommended a 2027 budget of B/.35,112 million with a deficit target of 2.97% of GDP. The MEF says the weighted average cost of public debt fell from 4.97% in December 2025 to 4.67% in July 2026, although interest payments rose moderately.

Official sources: MEF: Growth and deficit release, September 2026

How big is Panama's state budget?

Panama's draft General State Budget for 2027 is B/.35,111.7 million, B/.197.9 million (0.6%) more than the modified 2026 budget of B/.34,913.8 million, according to the Ministry of Economy and Finance. The central government's share falls 7.8%, from B/.17,935.6 million to B/.16,534.5 million.

The ministry attributes the fall mainly to public debt service, budgeted at B/.5,496.1 million in 2027 against B/.7,938.9 million in 2026, because of the calendar of maturities. About B/.3,400 million goes to subsidies and support programmes, including B/.1,496 million in central government contributions to programmes run by the Social Security Fund. The National Assembly must approve the budget.

Official sources: Ministry of Economy and Finance

How much tax does Panama collect?

Panama's central government collected B/.6,478.4 million in tax revenue in 2025, 14.3% more than in 2024, according to INEC's preliminary public sector budget execution report for 2024-25. Income tax brought in B/.3,292.9 million and the sales tax (ITBMS) B/.1,543.3 million.

Total central government revenue was B/.21,127.9 million, but that figure includes borrowing and other capital income. Tax revenue was 7.18% of GDP in 2024, according to the World Bank's tax revenue series. Much of Panama's revenue comes from non-tax sources, including payments from the Panama Canal Authority.

Official sources: public sector budget execution report for 2024-25 · tax revenue series

How much does Panama spend on debt payments?

Panama's central government spent B/.7,700.9 million on debt service in 2025, up from B/.5,363.9 million in 2024, according to INEC's preliminary public sector budget execution report for 2024-25. External debt took B/.6,082.5 million and domestic debt B/.1,618.4 million.

Debt service includes repayments of principal as well as interest, so it rises in years when large bonds mature. The Ministry of Economy and Finance reports that the average effective interest rate on public debt fell to 4.97% at the end of 2025, and that the non-financial public sector deficit fell from 6.23% of GDP in 2024 to 3.68% in 2025, below the 4.0% target in the Social Fiscal Responsibility Law.

Official sources: public sector budget execution report for 2024-25 · below the 4.0% target

What is Panama's government debt?

The latest figure from the IMF, for 2025, is 56.6% of GDP. Its high point since 2005 was 2020, at 62.4% of GDP; its low point was 2013, at 30.8% of GDP. Across Latin America & Caribbean the middle value was 65.6% of GDP, and Panama placed 22nd highest of 31. World rank, highest first: 84th of 185.

What is Panama's fiscal deficit?

-3.7% of GDP: that is general government net lending or borrowing in Panama for 2025, according to the IMF, which is a deficit. Its high point since 2005 was 2007, at 3.2% of GDP; its low point was 2020, at -9.7% of GDP. Across Latin America & Caribbean the middle value was -2.8% of GDP, and Panama placed 21st highest of 32. Of 188 countries with 2025 data, 120th highest.

How much does Panama's government take in?

17.3% of GDP: that is general government revenue in Panama for 2025, according to the IMF. Its high point since 2005 was 2007, at 25.3% of GDP; its low point was 2024, at 16.9% of GDP. It is 26th highest of 32 in Latin America & Caribbean, where the median is 24.9% of GDP. Of 187 countries with 2025 data, 148th highest.

How big is Panama's government spending as a share of GDP?

In 2025, general government spending in Panama was 20.9% of GDP, according to the IMF. The peak was 27.0% of GDP in 2020 and the low 20.5% of GDP in 2019. It is 25th highest of 32 in Latin America & Caribbean, where the median is 26.7% of GDP. Worldwide: 144th of 186.

How much tax does Panama collect?

In 2024, central government tax revenue in Panama was 7.2% of GDP, according to the IMF. No year since 2014 has been lower. Across Latin America & Caribbean the middle value was 15.0% of GDP, and Panama placed 14th highest of 14. Worldwide: 88th of 92.

What is Panama's military budget as a share of GDP?

0.0% of GDP: that is military spending in Panama for 2025, according to SIPRI. The figure has been the same every year since 2005. Across Latin America & Caribbean the middle value was 1.0% of GDP, and Panama placed 21st highest of 22. World rank, highest first: 147th of 149.