Panama’s economic growth projections for 2026 will remain unchanged despite the immediate negative impacts of the recent October 9, 2026 earthquake. Panama’s Minister of Economy and Finances (MEF), Felipe Chapman, confirmed that the government is keeping its Gross Domestic Product (GDP) growth forecast between 4.5% and 5.5% for 2026. While the seismic event will trigger a very short-term negative ripple in certain local sectors, MEF expects reconstruction and recovery investments to balance out the initial losses.
The minister stated that the damage identified so far is mainly concentrated in infrastructure, such as homes, hospitals, clinics, schools, roads, highways and bridges, while the direct impacts on productive activities appear to be minor. However, he acknowledged that damage to the roads will affect economic activity by hindering the transport of goods, the provision of services, and logistical operations in the affected communities. Chapman explained that investments aimed at rebuilding homes, repairing public facilities, and rehabilitating roads will also generate economic activity and job opportunities.
MEF announced that Panama will not suspend its fiscal rule. The target deficit ceiling of 3.5% of GDP remains strictly in place for the rest of the year. Total estimated damages to homes, roads, and healthcare centers across the central provinces (Coclé, Herrera, Los Santos, and Veraguas) are below the legal threshold of 0.5% of GDP (roughly $450 million). The damage did not cross the 0.5% threshold, consequently the government will fund relief efforts utilizing current budget allocations, international donations, and insurance payouts. Chapman also specified that Panama has up to $75 million available from the International Monetary Fund (IMF), resources that could be used under long-term financing conditions and without interest. However, he clarified that the Government does not plan to use these funds unless necessary, as it considers the available resources sufficient to address the emergency.
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