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Panama's economic activity rose 9.48 percent in April when compared to the same period a year ago.

Although the rising prices of fuel and food continue to act as a brake, the economy grew 11 percent last year and is expected to grow around 8 percent in 2008. Analysts remain positive about the economic outlook.

Last week the government announced it is to spend at least $40 million in the next six months to blunt the impact of further international price increases, with President Martin Torrijos saying on Friday he would boost subsidies on gasoline and electricity.

Panama currently has the highest GDP per capita in South America. The country has been largely driven by its inter-oceanic canal, and with the expansion due to be completed in 2014, Panama's GDP growth is expected to double or even triple.

In other news, the Canadian government has inked a new air transport agreement with Panama, offering a greater range of travel options. Air carriers from both countries have shown interest in operating scheduled air services between Canada and Panama, and are currently reviewing their plans in light of the new agreement.

Air travel, trade and investment between Canada and Panama has been growing in recent years and the agreement complements the recently launched exploratory discussions on a possible Free Trade Agreement. In 2007, bilateral merchandise trade between Canada and Panama totalled $115 million.

Meanwhile, property prices continue to grow in a country that has seen 70-80 percent capital appreciation. At least 24 percent annual capital appreciation is expected for the foreseeable future.

Panama's property boom began in the big cities, but investors are now focusing on coastal areas showing the fastest growth. DSR announced last month that their Bala Beach development apartments are selling fast. Now only a few studios remain.

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