Panama Roundup: IMF outlook, democracy concerns, drug seizures

Banana industry revival

The administration of President José Raúl Mulino has finalised an agreement with fruit giant Chiquita to restart banana production in Bocas del Toro, ending months of uncertainty for the local community. The Memorandum of Understanding, signed on August 6 in Brasilia, sets a framework for the reorganisation of the sector and paves the way for nearly 3,000 jobs in the first phase and 2,000 more in the second. Chiquita will invest 30 million balboas to reactivate 5,000 hectares of land, with operations expected by February 2026. A technical committee of government and company representatives will oversee compliance. President Mulino said the deal will restore stability, adding, “I will always work for investment, production, and job creation.”

IMF projects 4.5% growth in 2025

The International Monetary Fund has forecast that Panama’s economy will grow by 4.5% in 2025, supported by stable inflation, logistics, services, and the recovery of the Panama Canal. The IMF praised the government’s fiscal discipline and reforms to the Social and Fiscal Responsibility Law, which set deficit ceilings of 4% of GDP in 2025 and 2% in 2029. The organisation said these measures could reduce public debt to 40% of GDP by 2040, boosting market confidence. The report also highlighted that nearly 5% of GDP continues to be allocated to public investment in sectors including education, health, and infrastructure, balancing fiscal consolidation with social priorities.

IDEA warns of democratic stagnation

Latin America, including Panama, is facing stagnation in the quality of democracy, according to the International Institute for Democracy and Electoral Assistance (IDEA). Director Marcela Ríos Tobar noted regression across the region in representation, rights, rule of law, and participation. The IDEA Global State of Democracy Index, covering 173 countries, places Panama in a group showing strong electoral processes but weaker performance in rights and inclusion. The report, due September 11, warns that Panama’s democracy has remained stable but stagnant over the past five years, with setbacks in socioeconomic equality and citizen participation.

Migrants retrace their steps amid U.S. border closure

Donald Trump's new restrictions have caused thousands of migrants, mostly Venezuelans, to turn back from the U.S. border, leaving them stranded in the Panamanian port village of Miramar. More than 14,000 people have reversed their journey south, according to a recent report. Many had crossed the Darién Gap only to face renewed hardship. Gabriela, a 26-year-old Venezuelan mother, said, “I was hoping for a better future, but it was all for nothing.” Migrants wait in abandoned houses and tents, uncertain how to finance the next leg of their journey.

Authorities seize drugs bound for New Zealand

Panamanian security forces seized 39 packages of suspected narcotics concealed in a container originating from Morocco and destined for New Zealand. The operation was carried out by the drug prosecutor’s office and the national police. Police director Jaime Fernandez reported that authorities had confiscated seven tons of narcotics by the end of August 2025, sparking concern among security officials. In response, authorities convened to discuss stronger measures against drug trafficking, particularly in shipments routed through Panama’s ports and bound for Europe.