Just how much cheaper is life in Panama?
Good question, and much of the information you will find on-line is OUTDATED or very generalized. The folks who make a living offering seminars about offshore living and living internationally often hype how cheap it is in Panama compared to the US, without giving details.
I noticed something interesting talking with people on the Panama Relocation Tours. Jackie avoids the hype and encourages folks to browse prices in the stores, check out availability of drugs they need and prices, even take a look at what furniture, electronics are available, and they usually a stop at our little “big box” store, Price Smart. When folks check out the local grocery stores they’d frequently say, “I don’t think food is that much cheaper here than in the US.” Hmmm. Well, that got me to wondering. So when I was in the in September  I went to Costco in Santa Rosa, California.
Now Santa Rosa is in Sonoma County, the North Bay area, one of the most expensive areas in the US. In some parts of the US store prices are obviously going to be cheaper. I walked around with my clipboard and wrote down food prices. Then I came home to Panama and did the same thing at Price Smart and Rey supermarkets. Rey actually sent a security guard over to tell me I couldn’t check prices. I laughingly explained that I just wanted to see if prices were better at Rey than the new Super 99 across the road. He assured me that prices were cheaper at Rey … then when I pressed him a little, just smiled and winked. Panamanians are great at non-verbal communication! But I was almost finished and we parted friends. Rey is one of the better grocery stores. Then I went home and did the best I could, adjusting for the fact that Panama uses the metric system and the US does not.
So here’s a list of things I might buy in the store and a price comparison …
So, for me and for this list, food prices generally would be slightly MORE, not less, in Panama, and this was a comparison of prices in Sonoma County, one of the more expensive places to live in the US.
And this doesn’t take into account that most store chains in the US have weekly sales with loss-leader items, so if you shop carefully you can save big time. Panama stores NEVER have a genuine, US-style sale.
HOWEVER, understand that food costs are just one item.
If I lived in Sonoma County I wouldn’t be able to get my monthly buzz haircut for $3!! Figure $25 at Super Cuts. My car insurance would be more like $500 a month than $500 a year! For a house like ours we’d be paying at least $7,000 a year in property taxes, and in Panama I have a 20-year property tax exemption. My water bill is $60 A YEAR: try that in California! Trash is $30 A YEAR. An hour massage is $35 to $45 when the tourists are here, and off-season $25 to $30. My wife’s hair cut is $5 plus tip … my daughter had her hair cut in Somoma for $90! And she didn’t like it!
So looked at as a whole, Panama is less expensive than many places in the US.
Food and eating out have almost doubled in the ten years we’ve been here. Yes, you can still get a basic Panamanian-style lunch [chicken, pork or tough beef, rice and beans, and a tiny salad and drink] for $5 or less. But it you want to go out … Panamonte is Boquete’s oldest and most consistent restaurant offering good food, good service, and a wonderful ambiance. It seems to be the only place in town that doesn’t change owners, names or go out of business in 3 months. Dinner for two, no cocktails, but a glass of wine, tax is going to run your $50-60 for two. 25% off your entre if you are a Pensionado. In Seattle, overlooking the Sound and Pike Market, very high rent area, the local celebrated chef’ is Tom Douglas, and the restaurant is Etta’s. Same basic dinner restaurant is going to run $60-70 for two.
Now here’s what I don’t understand. Panamonte has been in the same family since 1946 whereas Etta’s is in one of the highest rent districts in Seattle. The minimum wage in Panama is $1.53 an hour plus tips (10% standard, but 15% in better restaurants) and the minimum wage in Seattle is $9.32 an hour plus tips (15% standard, but 20% expected). Given low, or no rent, huge difference in wages, and, OK, maybe food costs are similar, but why these prices in Panama?? Yes, gringos … mea culpa! … like a good restaurant and are used to paying, and tourists from Panama City are used to paying a lot to eat out, but in Boquete?
The single-dip ice cream cone which used to be 25 cents is now 65 cents. Hojaldre, the fried breakfast bread, used to be 10 or 15 cents, now its 25 cents. A great breakfast at Central Park (omelette with everything, 2 hojaldre, orange drink and coffee) used to be $2.50 and now is $5.25.
I see three reasons for the run up in prices: Panama is on an economic roll, the high cost of oil and we import most things, and the devaluation of the US dollar which is the currency of Panama.
It was interesting for me to notice that bananas cost about the same! Actually we don’t buy bananas since we have so many banana trees on our farm. We grow potatoes so why are we paying 20 cents more per pound. Meat is a lot more expensive in the US: must be all those hormones they add. I grant you my list is a pretty gringo list, but, hey, I are one … and I like eating what I like to eat. Sometimes I like the Panamanian staples of rice, beans, chicken and for variety chicken, rice, beans, but not all the time.