Is Panama City Really Cheap? The Real Cost of Living in 2026

No, Panama City is not cheap in 2026, expect to spend $2,150-$3,200/month minimum for basic comfort, or $3,450-$4,900/month for comfortable living with a car. While Panama City is cheaper than major US cities (New York, San Francisco, Toronto), it's NOT cheaper than Mexico City, rural Central America, or most Southeast Asian cities. The biggest expense is housing: safe apartments in decent neighborhoods (El Cangrejo, Costa del Este) cost $1,500+ monthly for one-bedroom, $2,000-$3,500+ for two-bedroom. Other major costs: car ownership ($400-$600/month), electricity with AC ($80-$200/month), groceries at supermarkets (expensive, though local markets are affordable), and dining out at mid-range restaurants ($400-$600/month if eating out regularly). The advantage isn't rock-bottom costs, it's quality of life at reasonable prices: excellent private healthcare, modern infrastructure, and safety.

Introduction

One of the biggest myths about Panama is that it's a cheap place to live. While it can be affordable compared to major North American cities, the reality is more nuanced. Many expats arrive expecting rock-bottom costs, only to discover that Panama City has experienced significant inflation and rising prices over the past decade. Let's break down the real costs of living in Panama City in 2026.

Housing: The Biggest Expense

Rental Prices

If you're looking for a safe apartment in a decent neighborhood, expect to pay a minimum of $1,500 USD monthly. This is for a one-bedroom in areas like El Cangrejo or Costa del Este. For a two-bedroom in a secure building, you're looking at $2,000-$3,500+ monthly, especially in upscale neighborhoods.

You can find cheaper apartments for $800-$1,200, but these typically come with trade-offs: less secure buildings, poorer neighborhoods, or older properties. One expat noted: "Real estate prices are over the clouds in the city."

Property Prices Surging

Buying property in Panama City has become extremely expensive due to a real estate boom fueled by foreign investment (particularly from Venezuela). Prices have skyrocketed, making homeownership challenging for many expats. What was once affordable has become comparable to many US markets.

Hidden Housing Costs

Beyond rent, factor in utilities (electricity can be expensive, especially with air conditioning), internet service, water, and building maintenance fees. These can add $200-$400 monthly to your housing costs.

Food & Dining

Grocery Costs

Supermarket shopping is not cheap. While fresh fruits and vegetables from local markets are affordable, shopping at El Rey or Riba Smith (the main supermarket chains) involves higher prices. Basic groceries can cost more than you'd expect, many items are imported or marked up significantly.

One expat noted: "Supermarket prices have increased quite a bit. Most of these problems can be mitigated by going to the market instead of supermarkets, but it is a hassle."

Restaurant Dining

Panama City has an outstanding food scene, but it comes with a price. Fancy restaurants easily cost $50-$70 for two people. Even casual dining at decent restaurants runs $20-$30 per person. The upside: there's incredible variety, Cantonese, Italian, Japanese, Thai, Indian, Vietnamese, and gourmet Panamanian cuisine all available.

You can eat cheaply at street food stalls and local restaurants, but if you're eating out regularly at mid-range places, budget $400-$600 monthly for dining.

Healthcare Costs

Private Healthcare (Recommended for Expats)

Private healthcare is excellent and much cheaper than the US. Clinic visits run $20-$50, dental work is affordable, and major procedures cost a fraction of what you'd pay in the States. However, you need private insurance, which costs roughly $100-$300 monthly depending on coverage.

Major hospitals like Punta Pacifica (Johns Hopkins affiliated) provide world-class care at reasonable prices. This is genuinely one of Panama's advantages.

Public Healthcare (Not Recommended)

Public hospitals are free for citizens but are reportedly in poor condition. Multiple expats warned that public hospitals are "really bad and dirty" and people often leave sicker than when they arrived. Most expats maintain private insurance and use private facilities.

Transportation

Car Ownership

If you need a car (which 99% of Panama City residents do), budget for:

• Car payment or purchase: $15,000-$30,000+
• Gas: $200-$300 monthly
• Insurance: $40-$100 monthly
• Maintenance and repairs: $100-$200 monthly
• Parking: $0-$200 monthly depending on location

Total car ownership: $400-$600+ monthly

Uber & Taxis

Uber is available and cheaper than traditional taxis. A typical ride costs $3-$8. If you don't own a car, Uber and occasional taxis might run $300-$500 monthly.

Metro System

The modern Panama City Metro costs just 35 cents per ride, an excellent value. However, it only covers certain routes, making a car essential for many.

Utilities & Internet

Electricity

Electricity is expensive in Panama, especially if you use air conditioning in the tropical heat. Expect $80-$200 monthly for a typical apartment.

Water

Water bills are relatively cheap at under $20 monthly, but water outages occur periodically, requiring stored water supplies.

Internet

High-speed internet from providers like Cable Onda costs $50-$100 monthly. Reliability varies, with occasional outages.

Entertainment & Nightlife

Panama City has excellent nightlife with bars and clubs throughout the city. Drinks range from $3-$8 at casual bars to $8-$15 at upscale venues. A night out easily costs $50-$100 per person.

However, there are free or cheap entertainment options: parks, museums, and exploring Casco Viejo.

Real Monthly Budget Breakdown

Budget Option (Minimal Comfort)

• Rent: $1,000-$1,500
• Groceries: $300-$400
• Utilities & Internet: $150-$200
• Transportation (Uber/Metro): $200-$300
• Healthcare: $100 (insurance)
• Entertainment: $200-$300
• Miscellaneous: $200
• Total: $2,150-$3,200/month

Comfortable Option (with Car)

• Rent: $1,500-$2,000
• Groceries: $400-$500
• Utilities & Internet: $200
• Car ownership: $400-$600
• Healthcare: $150 (insurance)
• Entertainment & Dining: $500-$700
• Miscellaneous: $300
• Total: $3,450-$4,900/month

Upscale Option (Costa del Este/Casco Viejo)

• Rent: $2,500-$3,500
• Groceries & Dining: $800-$1,000
• Utilities & Internet: $250
• Car ownership: $400-$600
• Healthcare: $200 (insurance)
• Entertainment & Activities: $800-$1,000
• Miscellaneous: $500
• Total: $5,850-$7,650/month

The Hidden Costs Nobody Talks About

Inflation Has Been Significant

Cost of living has risen dramatically over the past decade. As one expat noted: "Cost of living has increased a lot since I moved here." What was cheap 10 years ago is no longer bargain-priced.

Bureaucratic Hassles

Time spent navigating government offices, paperwork, and dealing with inefficiency has a hidden cost. Many things that would be simple in your home country require multiple visits and excessive paperwork.

Quality Trade-offs

Saving money often means accepting lower quality. Cheap apartments may have security issues, supermarket shopping costs more than markets but saves time, and cutting corners on healthcare is risky.

Comparison with Other Countries

Panama City is cheaper than:

• Major US cities (New York, San Francisco, Los Angeles)
• European capitals (London, Paris, Berlin)
• Canada (Toronto, Vancouver)

But Panama City is NOT cheaper than:

• Mexico City
• Rural areas throughout Central America
• Many Southeast Asian cities
• Parts of South America (outside major cities)

The Bottom Line

Panama City is moderately priced, not cheap. You cannot live luxuriously on a tiny budget. However, if you have a decent income ($3,000-$5,000+ monthly), you can live quite comfortably.

The real advantage of Panama isn't rock-bottom costs, it's the combination of affordability, excellent healthcare, safety, and modern infrastructure. You're paying for quality of life, not just low prices.

If you're moving to Panama expecting to live like a millionaire on a shoestring budget, you'll be disappointed. If you're realistic about costs and seeking a good quality of life at reasonable prices, Panama delivers on that promise.

Related Panama City Resources

• Panama City Complete Guide
• Housing and Relocation Services in Panama City
• Safety in Panama City
• Boquete Cost Comparison
• Add Your Business