Panama is increasingly being seen as an attractive investment destination in South America, according to a recent fDi Benchmark analysis.

The study, which compared more than 10 South American locations, showed Panama scored top in terms of accessibility and telecommunications coverage. 

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In terms of infrastructure quality, Panama was ranked second only to Chile. Good infrastructure may have contributed to the resilience of its economy.

Sectors that have performed particularly well in Panama over the past year include transport and communications, due in part to increased container traffic at ports and freight via the Panama Canal; sales of fuel and new vehicles; the hotel sector, thanks to an increased number of tourists entering the country; and construction and mining.

Based on a balance between quality and cost, Panama is one of the top five locations for FDI in financial services in Latin America, according to fDi Benchmark, an online subscription database which benchmarks cost and quality competitiveness for investment locations. Only Chile has a higher credit rating, with Panama rated on a par with Mexico and Peru. Panama currently has the fourth largest gross domestic product per capita in Latin America, behind Uruguay, Chile and Mexico.

A favourable economic climate in Panama is also reflected by fDiMagazine’s Caribbean and Central American Countries of the Future ranking, published in August and intended to identify the most attractive locations in the region for future inward investment. Panama was ranked fifth overall and is the top country in the region in several categories, namely for its economic climate and infrastructure.

Panama scored highly for strong economic growth and its FDI record. Not only has Panama received more FDI projects than most of its neighbours, but investments have been larger and more jobs have been created there than elsewhere in the region. 

As reflected in the Countries of the Future results, Panama weathered the recession better than other economies in the region. GDP in Panama grew by 3.2% in 2009, 7.5% in 2010 and by 9.7% in the first quarter of 2011 (IMF/National Statistics Panama). Only the Dominican Republic and Uruguay had a higher growth rate over the same period. Most economies in Latin America had negligible or negative growth in 2009.

So far in 2011 Panama has attracted 42 greenfield investment projects totalling $1.2bn against roughly similar figures for the whole of 2010, according to fDiMarkets data.