Does Panama depend too much on the Canal?

Published on September 29, 2026

In short: the Panama Canal delivered 2.965 billion balboas to the National Treasury in fiscal year 2025, a record, and directly accounts for around 3% of GDP, 7.7% when indirect effects are included, according to the IDB. The 2023-2024 drought cut transits by 20% and the State still collected more, because the Canal Authority raised tolls and auctioned slots. With the transport sector growing 14.5% in 2025, the most of any sector, the question Panama avoids is what would happen if the volume stopped coming back: through another drought, a Mexican corridor or a political dispute with the United States. The 1.6 billion dollar Río Indio reservoir will not be ready until 2031.

How much the Canal weighs, in numbers

Indicator	Figure	Source
Treasury contribution, fiscal 2025	2.965 billion balboas, 500 million more than in 2024	ACP
Treasury contribution, fiscal 2024	2.471 billion	ACP
Treasury contribution, fiscal 2023	2.545 billion	ACP, Martes Financiero
Cumulative 2000-2024	27.681 billion	La Estrella
ACP revenue 2025	5.705 billion, +14.4%	ACP
Transits 2025	13,404, an average of 33 a day	ACP
Direct share of GDP	3.1% in 2023	ACP annual report via BBC
Total contribution to GDP	7.7%, with 15.9% of exports and 55,000 jobs	IDB Invest
Transport and storage sector	13.2% of 2025 GDP, grew 14.5%	INEC, Comptroller General

Panama’s GDP grew 4.4% in 2025 and the sector that pushed hardest was transport, up 14.5% on the back of a 22% rise in Canal tolls. Commerce, at 20.4% of GDP, and construction, at 14.6%, remain larger in size, but neither depends so much on a single asset. The whole logistics sector, including ports, the free zone and the railway, contributed 11.8% of GDP and 138,892 jobs in 2024, according to APEDE using INEC data.

Key fact: in fiscal 2024 the drought cut transits from 14,080 to 11,240, 20% fewer, and tonnage by 17%. Revenue nonetheless rose 1%, because the ACP raised tolls and auctioned passage slots. The Canal lost volume, not money. That is the worrying part: price compensated once; nothing guarantees it will compensate twice.

What the drought taught

Between 2023 and 2024 Gatún Lake fell to levels that forced daily transits down from 36 to 22 in November 2023. Administrator Ricaurte Vásquez first estimated a 200 million loss and then between 500 and 700 million for fiscal 2024. The final result was better than forecast, but Treasury contributions did fall: 75 million less than in 2023. Normal operation, with 36 daily transits, resumed on 1 September 2024.

The structural answer is the Río Indio lake: a reservoir of 1.294 billion cubic metres, 4,600 hectares, about 550 families to be resettled and a cost of around 1.6 billion including compensation and social investment. The tender is expected in the first half of 2027 and completion between 2031 and 2032. Until then, the Canal runs on the same water it lacked in 2023.

The three threats being discussed and what they are worth

Threat	What it is	Real status
Tehuantepec Interoceanic Corridor (Mexico)	235 km of rail and ports between Coatzacoalcos and Salina Cruz	Operating, with a Mexico-European Union protocol from February 2026; analysts themselves call it a complement, not a substitute
Arctic route	Northern Sea Route, China to Europe in 18 to 20 days	A record 23 transits in 2025, only between August and October and with Russian permits; it competes with Suez, not Panama
Nicaragua canal	445 km between Monkey Point and Puerto Corinto, about 65 billion dollars	Relaunched in November 2024, with a Chinese feasibility study and no confirmed financing

The political threat is different. In March 2025 President Donald Trump told Congress his administration was going to take back the Canal; President José Raúl Mulino replied that he was lying. In March 2026, with Mulino present in Miami, Trump warned he would not allow “hostile foreign influence” in the Canal. In Davos, in January 2026, Mulino said Panama “is not for sale or up for discussion” and declared the crisis over. The sale of CK Hutchison’s ports to a consortium led by BlackRock remains the backdrop.

The underlying question

No official figure says Panama depends “too much” on the Canal; what they say is that the Canal is the fastest-growing asset, the biggest contributor to the treasury and the only one that can lose a fifth of its volume in a year for reasons the country does not control. The 2.965 billion contribution equals 37 times the Housing Ministry’s total 2026 budget and 18 times that of Pandeportes. When a single source pays that much, the question is not whether the Canal is good for Panama, which it is, but what the public budget would do in the year the Canal contributes 1.5 billion instead of 3.

What nobody has answered yet

What share of the 2026 public investment budget is financed by Canal contributions? The Finance Ministry publishes the contribution and the budget separately; it does not publish the dependence.
How much traffic would the Canal lose if the Tehuantepec corridor captured 10% of Asia-US East Coast cargo? No public Panamanian study models that scenario.
What happens to the Treasury contribution between 2027 and 2031, while the ACP finances Río Indio? The ACP has not published a surplus projection for the construction years.

Frequently asked questions

How much does the Panama Canal contribute to the State?

2.965 billion balboas in fiscal 2025, between surpluses, tonnage fees and charges. Between 2000 and 2024 it accumulated 27.681 billion.

What percentage of Panama’s GDP is the Canal?

Around 3% directly, according to the ACP annual report, and 7.7% when indirect and induced effects are included, according to IDB Invest.

How much did the Canal lose to the drought?

In fiscal 2024 transits fell 20% and tonnage 17%, but revenue rose 1% thanks to higher tolls and slot auctions. The Treasury contribution fell by 75 million.

When will the Río Indio reservoir be ready?

The tender is expected in 2027 and the works would finish between 2031 and 2032, at a cost of around 1.6 billion dollars.

Sources

Panama Canal Authority, fiscal 2025 Treasury contributions.
Panama Canal Authority, historical contributions table.
La Estrella, 27.681 billion in 25 years.
Martes Financiero, fiscal 2023 contribution.
Panama Canal Authority, fiscal 2025 results.
IDB Invest, the economic contribution of the Panama Canal, technical note 43.
BBC News Mundo, how much Panama’s economy depends on the Canal.
Comptroller General, 2025 GDP.
INEC, preliminary 2025 GDP figures.
La Estrella, logistics sector contributes 11.8% of GDP.
EFE via Infobae, fiscal 2024 revenue despite the drought.
La Prensa, drought loss estimate.
Panama Canal Authority, Río Indio lake project.
La Estrella, cost of the Río Indio reservoir.
Panamá América, Río Indio tender in 2027.
Estrategia & Negocios, Tehuantepec corridor.
NODAL, Northern Sea Route.
CIDOB, the Nicaragua canal.
AFP via Swissinfo, Mulino’s reply to Trump, March 2025.
EFE via Swissinfo, Trump in Miami, March 2026.
Newsroom Panama, Mulino in Davos.

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