New data from the United Nations reveals a contrasting economic picture for Latin America in 2024. While regional poverty rates have fallen significantly, Panama stands out as one of the few nations where income inequality has actually worsened over the past decade. The Economic Commission for Latin America and the Caribbean (ECLAC) published its annual social panorama report this week, highlighting these persistent structural challenges.
Monetary poverty across the region dropped to 25.5 percent of the population this year. That figure represents a 2.2 percentage point decrease from 2023 and a more than seven point decline from the pandemic’s peak impact in 2020. Extreme poverty settled at 9.8 percent, showing a slight annual reduction though it remains above pre-2014 levels. Despite this overall progress, the report warns that Latin America remains trapped in a cycle of high inequality, low social mobility, and weak cohesion.
“The region remains caught in the trap of high inequality, low social mobility and weak social cohesion,” [Translated from Spanish] the ECLAC report stated. It emphasized this is a structural condition not solved by economic growth alone.
Regional economic growth provided only a weak tailwind. The report confirmed that GDP per capita grew a mere 1.5 percent in 2024, signaling a clear deceleration of the post-pandemic recovery momentum. This anemic growth makes substantive improvements in living standards difficult to achieve for many households.
A Decade of Stagnant Inequality in Panama
Analyzing trends from 2014 to 2024 places Panama in a concerning category. The country appears alongside Colombia and Uruguay as one of the few where inequality has not decreased. Panama’s 2024 Gini coefficient, a key measure of income distribution, registered slightly higher than its 2014 level. ECLAC officials were quick to note the variation is of low magnitude but still represents a marginal setback.
This means Panama’s income concentration failed to reverse in any sustained way over the last ten years. The country likely continues to display a sharp divide between high income sectors and large vulnerable segments of its population. Underlying drivers include labor informality, territorial inequality, and uneven access to critical social services.
Panama’s household surveys remain part of the regional measurements for poverty, public transfers, and inequality. This confirms the availability of comparable statistical data for evaluation. The nation’s situation therefore presents a puzzle of progress in some areas stalling in others.
Panama’s Divergent Path from Regional Averages
A quick comparison with regional averages reveals Panama’s unique position. The nation participated in the broader poverty recovery, yet some social instruments like non contributory pensions showed limited or even counterproductive effects in specific statistical breakdowns. On inequality, the regional Gini index showed slight reductions between 2021 and 2024. Panama moved in the opposite direction, with its 2024 coefficient of 0.506 edging above the 0.503 recorded in 2014.
Employment trends tell a more positive story. Salaried employment explains much of the regional improvement. Panama distinguished itself because both salaried workers and independent workers contributed positively to distribution. This characteristic gives the country significant potential for formalization policies with distributive impact.
Informality remains a massive regional problem, affecting approximately 46.6 percent of workers. Formalizing these jobs holds high potential for reducing both poverty and inequality. Panama could benefit more than the regional average if it accompanies formalization with productive support and better market access for small entrepreneurs.
Data Gaps Exclude Several Nations from Full Analysis
The ECLAC report explicitly addressed the exclusion of Cuba, Nicaragua, Venezuela, and Haiti from some of its core analyses. It clarified that these omissions stem from technical and information limitations rather than political criteria. A lack of continuous official data since the mid 2010s led to Venezuela and Haiti being excluded from several fiscal and social analyses.
This is particularly true for statistics on public social spending and comparable household surveys. The situation in Haiti is further complicated by the absence of a national census for over twenty years. This gap prevents the construction of reliable and comparable data series for the Caribbean nation.
Cuba and Nicaragua face partial limitations regarding data access, coverage, and comparability. Key variables like income, multidimensional poverty, and public transfers often lack the standardization required for full inclusion in all chapters of the comprehensive report. These gaps underscore the challenges of measuring development across vastly different political and economic systems.
ECLAC’s findings suggest that Panama, despite its relative economic strength, has not cracked the code on inclusive growth. The slight uptick in its inequality metric serves as a cautionary note for policymakers. It highlights the need for targeted strategies that extend beyond general poverty reduction to address the deep seated drivers of income concentration.