The New Middle Class in Panama

Along with the pace of strong growth in the Panamanian economy in recent years, so too is growing a new middle class who are driving consumption.

Tuesday, July 12, 2011

Homes and cars are the main investment goals of the new Panamanian middle class. For the first objective, the government plans to establish subsidies with the Preferred Interest Act, which pays 4% market interest rate on home purchases up to $65,000. If the market rate is 6%, the customer will pay 2%, and the state pays the other 4%. For households from $65,000 to $ 80,000, the subsidy rate is 2%. In this price range people buying are those who work in banks, industries, business and the health sector, whose household incomes are above a thousand dollars a month. With a monthly income of more than $350, middle class citizens are able to buy a $30,000 home.

For the purposes of market analysis, middle class sub-sectors can be defined according to the range of housing they have, explained Elisa said Suarez, executive director of the National Housing Developers Council (Convivienda).

As for the size of the Panamanian middle class, an article in Martesfinanciero.com indicates it is "32% of the total population, which according to the census of 2010 amounts to 1,056,000 inhabitants."

More on this topic

Consumption Trends in Guatemala

September 2009

Future consumption in Guatemala is being shaped by growing urbanization and a very young demographic structure.

Business are starting to pay attention to and take advantage of the fact that almost half of the population are children, thus getting ready to build a solid base of potential loyal customers.

Trends for 2012: The Bottom of the Market

December 2011

Extreme global urbanization will not slow in 2012, and the base of the urban consumer pyramid, the "citysumers", will broaden.

In 2012, the opportunities to meet the needs of hundreds of millions of low-income urban consumers will be unprecedented.

There are hundreds of millions of consumers (Bottom of the Urban Pyramid - BOUP) who despite not having incomes matching those of the middle class, demand innovative products and services tailored to their needs and spending capacity.

El Salvador to improve housing conditions with IDB assistance

September 2010

$70 million loan to finance subsidies for low income households.

El Salvador will improve housing conditions for low- and middle-income families and boost the housing sector’s ability to efficiently and equitably meet demand with a $70 million loan approved by the Inter-American Development Bank (IDB).

How and What do Panamanians consume?

January 2009

A study by Urban & Associates details the profile of the Panamanian consumer.

The Martes Financiero weekly reported the most interesting results of the study, which was carried out based on a national survey of more than 1,800 consumers.

The article says that: "The data, according to Christine Urban, are interesting, because in addition to mentioning brands and specific products, it reveals the structure of the entire market.

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