Panama is attractive to many because of its international trade, white sand beaches, and lush green valleys. The cost of living in Panama depends on your location and consumption habits. Rent and property ownership are more affordable in rural areas than in suburban or urban locations.
The average living costs can suit various individuals, from investors and digital nomads to resident retirees. This article will give you detailed price guidelines and compare the expenses with those of other countries. It considers different factors, like food, education, and transportation.
Here’s what this guide will cover:
What Is the Cost of Living in Panama?
Panama has the third-highest GDP per capita in Latin America. Most of its income comes from the tourism industry, international trade, commerce, and banking.
The cost of living in Panama is economical compared to many countries. For about $800 to $1,500 per month, you can live comfortably in small towns, villages, and farming communities.
Panama City, the capital of Panama, requires a higher monthly budget of about $2,000 to $2,500. Groceries, restaurants, education, and healthcare costs are significantly cheaper than in the USA and slightly more affordable than in Costa Rica.
The country has well established expat communities. Most expats live in Panama City, El Valle de Anton, Santa Fe, Bocas del Toro, Pedasí, and Boquete. The table below provides a comprehensive coverage of the average cost of living in Panama.
Expense | City Life | Country Life | Expat Community |
Rent | $900 - $2,000 | $350 - $750 | $500 - $1,200 |
Groceries | $300 - $400 | $200 - $350 | $250 - $350 |
Transport | $50 | $20 | $30 |
Healthcare service per person | $100 - $300 | $100 - $300 | $100 - $300 |
High speed internet | $25 - $30 | $25 - $30 | $25 - $30 |
Electricity | $150 | $50 | $50 - $150 |
Other utilities (gas, garbage, water) | $25 | $25 | $25 |
Cable television | $20 - $30 | $20 - $30 | $20 - $30 |
Total cost | $1,570 - $3,000 | $770 - $1,580 | $1,020 - $2,130 |
*These numbers are a general estimate only.
Cost of Housing in Panama
Housing market rates in Panama vary depending on your budget, location, and lifestyle choices. It is one of the more expensive places in Central America, but its economy is competitive and relatively stable.
The cost of living in Panama for a single person is 36.3% lower than in the U.S. You can pay 49.5% less for housing, making the country a reasonable option to settle or open a business.
Renting a one-bedroom apartment in the central part of Panama City can cost $800 to $1,500 a month. The capital has several industries that offer better-paying jobs. Many expats work in tourism, real estate, IT, international trade, and human resources.
Suburban areas are a more economical alternative to the city center. The rent for an apartment can range from $500 to $900 a month. The suburbs are close to modern amenities like private schools, shopping malls, private healthcare, and restaurants.
Real estate in the province has the cheapest rates, with an average rent of $400 to $700 a month. Small towns like Las Tablas have reduced congestion, closer proximity to nature, and offer a more peaceful lifestyle.
If you want to buy a property in a rural area, the average starting cost is $70,000. Luxury properties in urban settings begin at $200,000. Panama City has several prime locations for luxury real estate, such as Punta Pacifica, Costa del Este, and San Francisco.
The Residency and Citizenship by Investment program gives foreign nationals full citizenship through investments. It is affordable, flexible, and offers many tax benefits. It boosts the local economy and quality of life.
Healthcare Costs in Panama
Medical expenses in Panama are very accessible for different budgets. Services and procedures are half to a quarter of the price they would usually be in the U.S. For example, if you would pay $8,000 to $15,000 for a procedure in the U.S., that same service can cost $4,000 and $6,000 in Panama.
Small clinics offer essential services at a fraction of the cost of private hospitals. Here are other factors to consider when comparing the cost of living in Panama vs USA.
Health insurance
Health insurance offers flexible and extensive coverage. Premiums can range from $50 to $125 per month. International insurance plans cover various conditions and needs, with an annual cost of $2,800 to $5,700.
Dental visits
A routine dental checkup can cost $50 to $100, while treatments like fillings, ceramic veneers, and bone grafting can range from $150 to $900. Expats find they can save well over $100 on dental services compared to the U.S.
Transportation Costs in Panama
Transportation expenses are reasonable in Panama. For example, the Panama Metro system charges about 35 cents per ride. Buses can cost over 25 cents. Whether you commute for work or shopping, you can save money on fuel.
The Panama Canal is a key component of maritime transportation. The waterway connects the country to the Pacific and Atlantic Oceans. Due to international trade and growing tourism, the cost-of-living index is about 45.66.
It is very economical to own a car, pay parking fees, and pay for other expenses. Auto insurance and car maintenance are much cheaper in Panama than in the U.S. Gasoline costs about $4 per gallon.
When analyzing the cost of living in Panama per month, consider your location, local traffic patterns, and how frequently you travel. While it is more efficient to own a car, you can save more money using public transport.
Expenditure | Average Cost |
One-way ticket with local transport | $0.50 |
Taxi rides (1 mile) | $3.22 |
Gasoline (1 gallon) | $3.67 |
Gasoline (1 gallon) | $150 |
Cost of Food in Panama
Food is relatively affordable in Panama. You can spend anywhere from $200 to $400 on groceries. Buying local products at local markets is cheaper than supermarkets. Imported goods and specialty products often cost more.
Dining out can be very economical. Many businesses contribute to the local economy. For example, medium-range restaurants charge lower prices for various international cuisines. The table below indicates the average prices for some of the most sought-after foods and drinks.
Expenditure | Average Cost |
Domestic beer (1 pint draught) | $2 |
Cappuccino (regular) | $3.61 |
Loaf of fresh white bread (1 lb) | $2.17 |
Eggs (12) | $2.52 |
Chicken fillets (1 lb) | $3.26 |
Cost of Education in Panama
Panama has a structured education system. The government has increased its budget for public schools and universities. Compulsory education in public schools is free. However, expats prefer to enroll their children in private schools due to modern infrastructure and higher ratings.
Kindergarten or preschool is reasonably priced and convenient for working parents. You may spend hundreds of dollars or about $250 to $565 per month for a full-day private preschool.
Tuition for international schools in Panama can vary from $5,000 to $14,400. The monthly cost is significantly more expensive; however, they maintain higher standards and follow an American curriculum.
Cost of Living in Panama vs. Other Countries
Panama adds value and variety. Its favorable climate, terrain, and mix of cultures allow expats to adapt quickly. The cost of living in Panama vs Costa Rica is slightly more economical and significantly cheaper than in the U.S.
Everyday items like beer, wine, meat, and bread are 20% to 60% cheaper in Panama than in the U.S. Rice is a common product and is significantly cheaper, whereas milk is more expensive in Panama.
About 17% of your monthly wage goes on essential utilities like air conditioning, electricity, water, and garbage collection. If you are frugal, you can spend less than 30% on general shopping expenses, especially when living in the city.
As an expat, a Panama passport grants full citizenship, greater security, mobility, and long-term stability. It provides visa-free access to over 140 countries, including Colombia, France, and the Philippines.
Expenditure | Panama | Costa Rica | United States |
One bedroom apartment in the city center | $450 - $1,500 | $600 - $750 | $3,800 |
Utilities (water, heating, air conditioning, garbage, and electricity) for a medium-sized apartment | $120 - $200 | $79 | $300 |
Internet service | $50 | $48 | $65 |
Meal for two, mid range restaurants, three-course | $60 | $50 | $130 |
General shopping expenses | $80 - $160 | $83 - $170 | $300 |
Other key factors to consider for expats in Panama
Panama has a strong economy, excellent tax benefits, a humid climate, and an accessible job market.
When relocating, you may want to compare the cost of living in Panama vs South Africa. Without rent, living costs are 38.6% higher in Panama than in South Africa. Renting a place in Panama is almost double the price in South America.
Other factors include:
- Favorable tax policies for expats. The country exempts all income earned outside its borders. The tax system is territorial; therefore, locals and expats are taxed only on revenue produced from Panamanian sources.
- Tropical climate. Expect a wet and dry season with very high humidity. The excess condensation and moisture can be uncomfortable for some people.
- Safety and security. Panama is relatively safe. However, the capital city and tourist spots may experience higher crime rates, such as petty theft.
- Job market. Panama is a strategic location for industries and multinational companies to do business. You can earn a sustainable income in supply chain management, tourism, healthcare, marketing, technology, and related fields.
Tips to live comfortably on a budget in Panama
Clever budgeting techniques create a framework for sustainable living practices. They can mitigate some of the Panama costs.
These tips include:
- Find affordable housing. Rent in rural locations can be 30% to 50% cheaper than in Panama City. You can save about 30% on monthly utilities and roughly 20% on groceries and dining.
- Cook at home. Eating out or ordering delivery increases food expenses. Making your meals from scratch can save you about 40% on food costs.
- Use public transport. Public transportation is cheaper than driving. It mainly relies on taxis, buses, and metros. The capital has a vast network of routes that connect all major destinations.
- Be energy efficient. Manage your overall energy consumption. Switch to appliances that use the least amount of resources.
- Learn basic Spanish. About 95% of Panamanians speak Spanish. However, very few locals, around 14%, know English. They may use English in international trade, business, or finance, mainly in restaurants and hotels.
Frequently Asked Questions About the Cost of Living in Panama
What are the main expenses when living in Panama?
Most income goes on rent, groceries, dining, commuting, utilities, maintenance, and healthcare. Recurring payments like leisure activities, subscriptions, insurance, and tax rates are relatively accessible. Children’s school fees vary based on the type of school they attend.
Are there any hidden costs when living in Panama?
Rent might be affordable in Panama, but there are some hidden costs. Expenses like childcare, housing maintenance, and international school tuition add up. For example, hiring a nanny can cost $300 to $400 a week. Tuition for a non-sponsored student comes with extra costs.
Are houses in Panama expensive?
Housing prices in Panama are reasonable and competitive. You can find a home that fits your budget. For about $2,000 to $2,500, you can live comfortably in Panama City. More affordable units are available in small towns, mountain villages, and suburban locations.
Which expat communities are more affordable to live in Panama?
Large expat communities often choose a rural environment over the city center. Rent can cost 30% to 50% less in places like Coronado, Santa Fe, and Boquete. Older buildings with studio apartments have the lowest rents but lack other amenities like additional security.
What are the average costs for a family of four in Panama?
The monthly costs for a family of four are about $2,900 without rent. Groceries can cost around $400 to $700 per month. Buying food at a local farmers market can reduce your expenses. Fresh and local produce is more affordable than imported goods.
