Why My Money’s Firmly On This Miracle Market
I’ve been investing globally for nearly 30 years.
Panama stands out.
This country stacks up as an investment market better than any other I’ve known.
The Canal makes Panama an ultimate safe haven. The critical global trade route generates nearly US$4 billion a year. That’s a huge amount of per-capita cashflow in a country of four million people.
Panama’s economy cycles up and down like any other, but its dips are less severe and shorter lived than most, certainly than any other country in the region.
Plus this country rolls out the welcome mat for foreign investors, big and small.
I’ve been focused on this market for two-and-a-half decades.
Are We At The End Of A Very Long Bull Run?
Nah. Panama’s star continues to rise.
As my Overseas Property Alert Editor Con Murphy points out, the “convergence velocity” of the Panamanian economy is almost breakneck.
Convergence velocity is the speed at which one country’s economy is catching up with that of another.
The chart below shows how fast Latin American countries are catching up with the gross domestic product of the United States…
Countries moving closer to U.S. living standards are darker blue and higher up on the chart. Those falling behind the United States are green or red and lower down.
Most countries in the region are near the green area (around the y-axis), meaning limited or no improvement in living standards.
Half the Latin American economies are losing ground against the U.S. economy. This is a “negative convergence.”
Meantime, Chile and the Dominican Republic are catching up with the United States.
But Panama? Panama is in a league of its own.
It’s closing in on U.S. standards of living 17 times faster than the regional average.
Panama had a GDP of US$12 billion in the year 2000.
Today Panama’s GDP is US$63 billion.
That’s an inspirational increase.
What’s Going On?
Here’s why I continue to rank Panama as the world’s top investment market overall…
Panama is a critical global point of connection naturally… and the canal connecting the Atlantic and Pacific oceans makes its position of paramount value.
Panama is all business and promotes an open economy that welcomes and protects investor rights. Colón is the world’s second-largest free trade zone.
Port, Airports, and Other Infrastructure:
Panama continues to plough billions into ports, roads, and rail networks, encouraging more foreign investment. The canal capacity was doubled in 2016 to allow mega-container ships to traverse the isthmus.
Panama has invested in a vast copper mine, boosting its raw material exports significantly.
Currently tourism generates only 2.9% of Panama’s GDP. The untapped potential is huge. The government has made this a priority agenda. It has announced a new cruise ship terminal and convention center in Panama City, plus a US$300 million investment in PROMTUR, a marketing agency to promote the country around the world.
Panama’s economic progress is so strong that it is predicted that by 2030 Panama will leave its status as a developing nation behind and join the ranks of first world nations.
The Best Predictor Of Future Prosperity Is A Growing Middle Class
The middle class in Panama expanded from 50.8% of the population in 2015 to 56.9% in 2019.
By comparison, the American middle class is shrinking. It has shrunk from 61% in 1971 to just 50% in 2021.
Today, Panama has a relatively larger middle class than the United States.
A middle class has money to spend on everything from education for their children to housing and other investments.
Moreover, the IMF expects the Panamanian economy to grow at a rate of 5% per annum until 2029.
The writing is on the wall. While the United States and other Western economies are stagnating, Panama’s economy is only starting its upward trajectory.