Salary Growth in Panama 2025-2026

The average salary adjustment for 2025 was 3.4%, according to data from the Ministry of Labor (MITRADEL) and consultancies like Konzerta and Michael Page. This adjustment, although moderate, exceeded inflation (-0.2% in December 2025), resulting in a real improvement in purchasing power for many workers.

The average intended salary by Panamanians closed December 2025 at $1,068 USD, according to Konzerta's Labor Market Report. The highest peak was recorded in February 2025 with $1,079 USD. This reflects a 1.82% annual accumulated increase in salary expectations.

By sectors, the highest aspirations concentrated in Finance (with $2,500 for Manager and Supervisor) and Construction (also $2,500), followed by Technology with $2,350 for high-level management. These sectors lead not only in salaries but also in 2026 growth projections.

The Panamanian paradox is notable: despite having the lowest inflation in Latin America in 2025 (-0.2%, technically deflation), many workers feel they're losing purchasing power. This is because deflation was selective: health (-2.1%), transportation (-1.9%), and communications (-1.8%) decreased, but food and housing remained high, components that weigh more in the basic basket.

For 2026, the IMF projects 2.0% inflation for Panama. With salaries projected to grow >3.5%, this would mean a real improvement in purchasing power of approximately 1.5%, positive but modest. The average basic basket remains at $149, and although salaries grow, recovery to pre-pandemic level remains slow for many households.

The key for 2026 will be whether projected salary adjustments fully materialize. According to Michael Page's Compensation Study, 32.2% of companies plan increases of 3-4%, 30.4% of 4-6%, and only 8.2% of 7-8%. This suggests that most workers will see increases that barely exceed projected inflation.

The talent shortage in key sectors like technology, health, and finance is pressuring salaries upward. Companies are willing to pay premiums of 15-25% for professionals with certifications, demonstrable experience, and specialized skills. This creates a growing divergence between qualified and unqualified professionals.

Talent retention has become a strategic priority. With 41% of workers feeling unrecognized and 53% considering job changes, companies are implementing retention bonuses, professional development plans, and frequent recognition. 45.6% of employees want performance rewards, while 44% ask for inflation compensation.

Remote and hybrid work also impacts salaries. Professionals working for foreign companies in remote mode can earn 30-50% more than their local counterparts. This is creating salary pressure on local companies that must compete for the same talent, especially in technology and professional services.

Prepare with data: Research market salary ranges for your role, sector, and experience level. Use sources like Glassdoor, Levels.fyi, Paylab, and Michael Page's Compensation Study. Knowledge gives you negotiating power.

Demonstrate value: Document your quantifiable achievements: successful projects, optimizations that saved money, improved processes, certifications obtained. Numbers speak louder than words.

Consider the total package: If you can't negotiate base salary, consider flexible benefits: extra vacation days, flexible schedule, training budget, stock options, performance bonuses. 46% prioritize base salary, but 29% prefer bonuses over days off.

Make strategic counteroffers: If the offered increase is less than expected, ask for a 6-month review linked to specific, measurable goals. This demonstrates confidence in your ability and aligns incentives.

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