| Summary: | Panama's growth model is at crossroads and the country must be prepared for the new growth model. The objective of this study is to investigate the drivers and constraints of growth and productivity in Panama and explore areas with high growth potential. The value added of the study is to provide an in-depth analysis of the drivers and constraints of Panama's growth using a wide range of analytical tools. The analysis employs several quantitative methods to provide an objective assessment of the drivers and constraints of growth in Panama, including the long-term growth model (LTGM), computable general equilibrium model (CGE), growth diagnostics and product space analyses. The novelty of this study is to employ the same framework, analytical tools, and data to conduct a parallel analysis for each Central American country to allow for a meaningful cross-country comparison. Therefore, given the wide breadth of the study, in terms of the methodologies used, themes analyzed, and countries covered, it does not envisage to deep dive into each driver and constraint of growth and provide granular policy recommendations. The core objective of this study is to inform the policy makers and other interested parties about the country's strengths and weaknesses for its growth, and to establish the analytical basis for a subsequent investigation of specific areas
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