If you’re planning to retire overseas, it’s a good idea to pay attention to the economic situation in that country. Here’s why a healthy economy is important, even for retirees:
Considering the world’s top retirement havens from this point of view, the one that rises to the top of the list is Panama.
Panama's GDP is $30 billion. It's per-capital GDP is $14,000, making it the second-richest country in Latin America (after Chile). Further, Panama’s clear and stated agenda is to double those figures in the next 10 years. And it's on track to do that.
Panama has the fastest-growing economy in the Americas. The Panamanian economy is, simply, in a different league than that of any other country in this part of the world. It has grown every one of the past dozen years, including in 2008 and 2009.
The cornerstone of Panama's ongoing and enviable growth is the Panama Canal. For the past 14 years, the Panamanians have run it successfully and profitably. Within the next two years, they'll complete the Canal expansion that they've been hard at work engineering for the past six years. This will mean more ships, bigger ships, more crossings and bigger revenues.
It's not only Canal revenues that are driving Panama's expanding economy. The ripple effect of the Canal is, like the Canal itself, big business. And, in addition to the Canal, Panama is also enjoying the proceeds from big and growing financial services and transportation industries.
Money is pouring into this country from elsewhere in the region and North America, Europe, Russia, China and the Middle East. Foreign direct investment inflows into this country reached $1.7 billion in 2009 and $3 billion in 2011. Big companies from around the world are taking advantage of Panama's open-door policies and incentive programs including Maersk Line, Halliburton, P&G, Dell, Caterpillar and Sinopec.
Thanks to all this growth, the country's unemployment rate has dropped significantly, from between 8 percent and 12 percent (depending on which set of numbers you use) to around 4 percent today. The three leading U.S.-based credit rating agencies all have awarded Panama investment grade status, making it part of a select group of such countries in the region.
The country's flagship airline Copa has invested more than $6 billion in new aircrafts and now serves 65 destinations in 29 countries. Copa has also introduced “no penalty stop-overs” to encourage some of its millions of transit passengers to take time out to enjoy the fun and shopping available in Panama City.
The big and practical benefit of all of this for retirees is the infrastructure. It’s better than anywhere else in Central America. The transportation, telecommunications and banking infrastructure in this country exists on a higher level and works on a more reliable basis than anywhere else in this part of the world. And it’s improving all the time.
A new 13.7-kilometer Panama City Metro is under construction. In the capital, a new park and pedestrian area has been created and is being expanded along the Bay of Panama where now you see local residents walking, jogging, biking, hanging out and shooting hoops from early in the morning until well past sundown. This new green space has reinvented downtown Panama City life.
A new highway has opened connecting Panama City with the country’s Caribbean coast at Colon. The international airport is undergoing a mammoth expansion, and a new international airport has opened to service the country’s key beach resorts outside the capital.
New roads, shopping malls, hospitals and health care centers are being developed not only in Panama City but across the country, meaning retirement in Panama is becoming easier and better supported all the time.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 28 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring and investing overseas in her free e-letter. Her newest book, "How To Buy Real Estate Overseas", published by Wiley & Sons, is the culmination of decades of personal experience living and investing around the world.