One Mine Now Decides Whether Panama Grows Fast or Slow

Economy

Key Facts

—The split path. Panama’s industrial lobby, the SIP, says growth could reach 6% in 2027 if the Cobre copper mine reopens, but only 3.7% if it stays shut.

—The gap. That is a difference of roughly 40 percent between the two outcomes, turning on a single political decision.

—The base. Panama grew about 4% in 2025, led by services, with inflation near zero and unemployment around eight and a half percent.

—The fiscal prize. A restarted mine could add at least $500 million a year to state revenue, easing the deficit.

—The decision. President José Raúl Mulino’s government is weighing whether to allow First Quantum’s mine to reopen, a call the whole forecast hangs on.

Panama’s Panama growth forecast for the next two years now rests on one decision: whether to reopen the huge copper mine it shut in 2023. The country’s own industrialists say the difference is the gap between a strong economy and a merely steady one.

For an outsider, this is a rare case where a single project moves a whole nation’s numbers. The mine was so large that closing it knocked out a meaningful slice of both Panama’s exports and the world’s copper supply.

The country closed 2025 with growth of about four percent, carried mostly by services such as transport, logistics and tourism tied to the canal. Manufacturing, by contrast, barely moved, a sign that the productive base has not yet found a new engine.

Why the Panama growth forecast splits in two

The Union of Industrialists of Panama, the country’s main business lobby known as the SIP, laid out two futures. In its optimistic case, with the Cobre mine back and canal-linked projects advancing, the economy grows six percent in 2027.

In the pessimistic case, with the mine still idle, growth slows to around three and a half percent. As reported in the mining trade press, the gap between those two paths is close to forty percent.

Private forecasters go further still. The consultancy Mens Consultores projects growth could touch five and a half percent as early as this year if the mine restarts and the canal keeps expanding, well above the four percent the international bodies expect.

The mine matters for more than the export column. The SIP argues its closure hurt jobs, private investment and the fight against informal work, and that a reopening would ripple through employment, consumer spending and tax receipts alike.

A political decision with an economic price tag

The choice sits with President José Raúl Mulino, who had signalled a decision on whether First Quantum can restart the mine. The government and the company have reportedly agreed a starting basis for talks, including the principle that the state owns the mineral resources.

One option under study would let the company first process copper already dug up and stockpiled, yielding perhaps seventy thousand tonnes in a year without resuming full-scale mining. That would be a gradual reopening rather than a sudden switch back on.

For foreign investors and residents, the read-through is simple. Panama’s medium-term story is unusually binary right now, and the same decision that shapes the copper market will also decide whether the local economy shifts up a gear or holds its current pace.

There is a wider lesson in how exposed the country has become. With the mine shut, Panama leaned harder on primary goods such as shrimp, fish and bananas, weakening the very export diversification that a modern economy is supposed to build.

The financial centre remains a strength through all of this. Analysts note that the total assets of Panama’s banking sector are worth close to twice the size of the whole economy, a cushion that few small nations enjoy.

Yet even that strength carries a caveat. Panama continues to face pressure over international tax lists and a debate about its territorial tax model, a reminder that its future depends on decisions made abroad as well as at home.

What does the Panama growth forecast depend on?

It hinges mainly on whether the Cobre copper mine reopens. The SIP projects six percent growth in 2027 if it does and about three and a half percent if it stays closed, a difference of roughly forty percent.

How much would the mine add to state finances?

A restarted mine could contribute at least five hundred million dollars a year in revenue to the Panamanian state. That would strengthen the fiscal balance and help bring down the deficit.

Who decides whether the mine reopens?

The decision rests with President José Raúl Mulino’s government, which is negotiating terms with the operator, First Quantum. Talks reportedly start from the principle that the state owns the mineral resources.