The strengthening in economic growth last year made possible a reduction in the unemployment rate from 14.3% to 13.2%, as a net 45,000 jobs were created. The rate of unemployment remains among the highest in Latin America and it has been a persistent problem in the past decade, with the surge in growth in the early 1990s only slowly bringing down the figure from its crisis level of 16.3% in 1988-89. On the other hand, there is a very large informal sector, which means that many jobs go unrecorded.
-- as did inflation
Panama is distinct in the region for having a tradition of low inflation owing to its use of the dollar as currency. Over the period 1992-96 the average was just 1.2%. At end-1997 the annual rate was only 1.2%, compared with 2.3% at end-1996. (The average for the full year is slightly above 1996, at 1.5% against 1.3%.) In 1997 an additional factor checking price pressures was the abolition from the beginning of the year of all quotas and quantitative restrictions on imports, in line with Panama's entry into the World Trade Organisation (WTO), as well as the continuing reduction in import tariffs.