Central America's Tropical Paradise Country Boasts One Of The Lowest Costs Of Living In The World

Panama is famous for many different things — the Panama Canal, its diverse cultural heritage, an incredibly rich biodiversity (tripling that of North America and Europe combined), and its unique geography allowing you to glimpse both the Atlantic and Pacific oceans at the same time. But it's also one of the countries with the lowest cost of living in the world.

With the combined cost of food, housing, and transportation being much more affordable than that of countries like the United States, for example, this tropical paradise has become a favorite relocation destination for expats. Numbeo lists Panama with a 43.60 cost of living index, while that of the U.S. is listed as 65.78. The difference is fairly reasonable. 

Many expats also mention that "it's easy to move to Panama as a foreigner and find ample and affordable housing." Of course, the final cost of living in Panama will greatly depend on the city and region of your choice as well as on your lifestyle.

Panama isn't exactly a "cheap" country. Regardless, it has become a top choice for living in the Caribbean among expats because the country's economy and currency is based on the U.S. dollar, which keeps the country's economy stable, with inflation and market price changes remaining mostly unchanged. Since local monthly salaries range from $600 to $1,500, both earning and spending power cover the same spectrum — making it an affordable country for foreigners.

Housing costs depend greatly on the city and neighborhood of residence, with Panama City being one of the most expensive cities. For rent, prices range from $600 for a single-bedroom apartment in the city center to around $3,500 for a 3-bedroom in the same area. If choosing a neighborhood outside of the city center, rent prices will range from $400 to $2,500 depending on the apartment.

Utilities in Panama cost around $100 and groceries for one person may vary depending on the region, but prices go from $120 to $350. Healthcare is also pretty affordable, starting at $25 to $60. As for transportation, bus rides cost $0.25 to $0.35 in most cities. Taxis tend to start their rates at $2.50 with the highest rate per kilometer being $0.70. Gasoline prices range from $0.55 to $0.75 per liter. And lastly, entertainment costs in Panama are also pretty cheap, with most amenities costing a lot less than $100.

Besides Panama City, there are many other affordable locations. For example, Santiago, with rent and food prices ranging between $400 to $500 and $80 to $120, respectively. Colon is a historical city to the north of the Panama Canal with prices similar to those of Santiago. La Chorrera, only 15 miles away from Panama City, is also another good option, as well as David and Penonome.

Since Panama is very well known for its gorgeous beaches, living in these regions is worth looking into. Prices don't vary that much from those in the big cities, except for Coronado. With monthly budgets for housing, utilities, and food of around $2,500, most expats have put down roots in this seaside town. Located one hour away from Panama City, Coronado is still cheaper than the U.S. Yet, compared to other places in Panama, it is still a rather luxurious location to settle down.

Pedasi, an overlooked town in Panama's Pacific coast, offers more affordable living without losing that luxurious feel. It provides travelers and residents with both stunning views and beautiful beaches — some even catering to surfers. The town's rich culture and lively festivals will also capture the hearts of anyone choosing it as their home. Other idyllic beach towns popular among expats include San Carlos, Las Tablas, and Bocas del Toro. Without a doubt, Panama offers myriad opportunities for starting a new and affordable life in a tropical paradise away from home.