With unemployment rates at 8.8%, Panama has the 2nd highest unemployment rate in Central America, after, Belize. The population living in poverty is estimated at 30%. However, the Panamanian economy grew 8% in 2006 and for the first time in the last ten years the public sector closed the year 2006 with a trade surplus of USD 88 million.[verification needed] Furthermore the GDP nominal revised in 2006 reached USD 16,704 billion.
Panama's economy is service-based, heavily weighted toward banking, commerce, and tourism, due to its key geographic location. The handover of the canal and military installations by the USA has given rise to new construction projects. The Martín Torrijos administration has undertaken controversial structural reforms, such as a fiscal reform and a very difficult Social Security Reform. Furthermore, a referendum regarding the building of a third set of locks for the Panama Canal was approved overwhelmingly (though with low voter turnout) on 22 October 2006. The official estimate of the building of the third set of locks is US$5.25 billion.
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The high levels of Panamanian trade are in large part due to the Colón Free Trade Zone, the largest free trade zone in the Western Hemisphere. Last year the zone accounted for 92 percent of Panama's exports and 65 percent of its imports, according to an analysis of figures from the Colon zone management and estimates of Panama's trade by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
Panama fared decently in tourism receipts and foreign direct investment as a percent of GDP (the fourth-highest in Latin America in both categories) and internet penetration (eighth-highest rate in Latin America).
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