Services include banking, commerce, insurance, container ports, and flagship registry, medical and health and tourism.

[14] The country's industry includes the manufacturing of aircraft spare parts, cement, drinks, adhesives, and textiles.

[17] Panama has always been dependent on world commerce for its prosperity,[17] and it is affected by the cyclical nature of international trade.

In the mid-19th century, Panama's economy boomed as a result of increased cargo and passengers associated with the California Gold Rush.

[18] However, the world depression of the 1930s reduced international trade and canal traffic, causing widespread unemployment in the terminal cities and generating a flow of workers to subsistence farming.

[17] This period coincided with the rise to power of General Manuel Noriega during which Panama became increasingly indebted.

The most important sectors which drove growth were the Panama Canal and the shipping and port activities of the Colón Free Trade Zone.

In May 2009, Ricardo Martinelli was elected president, and promised to promote free trade, establish a metro system,[22] and complete the expansion plan for the Panama Canal.

As a result, Panamanian banks are very conservatively run, with an average capital adequacy ratio of 15.6% in 2012, nearly double the legal minimum.

[26] Major agricultural products include bananas, cocoa beans, coffee, coconuts, timber, beef, chicken, shrimp, corn, potatoes, rice, soybeans, and sugar cane.

Lack of sanitation, electricity, basic water, health, and education amongst the poor is a serious problem affecting Panama’s housing conditions.

In February 2005, Panama's unicameral legislature approved a major fiscal reform package in order to raise revenues from new business taxes, and increases the country's level of debt.

[32] Traffic in Panama moves on the right, and Panamanian law requires that drivers and passengers wear seat belts.

[32] Currently, Panama used to have an extensive and efficient, yet confusing to tourists, form of public transportation consisting of colorful painted buses colloquially known as diablo rojo.

A diablo rojo is usually "customized" or painted with bright colors, usually depicting famous actors, politicians or singers.

It is now popular all over the city (and also in neighboring towns) for bus drivers to personally customize the interior and exterior of their diablo rojo.

Panama City's streets experience frequent traffic jams due to poor planning.

Growth has been fueled by the construction sector, transportation, port and Panama Canal-related activities, and tourism.

As a result of this growth, government deficit as a percentage of GDP dropped to 43% in 2009, and government-issued debt achieved investment grade in February 2010.