The 66-year-old won an election two weeks ago that was the tightest in Panama's recent history, triumphing with only 31 per cent of the vote as the candidate of the Democratic Revolutionary Party.

Cortizo, who succeeds Juan Carlos Varela, said on Monday he would stoke the economy by pushing for public-private partnerships for infrastructure projects and also address corruption in government contracting.

"We have monumental challenges," he said.

"We're coming off a decade lost to corruption. There's no place for indifference in the country."

Noting that some 700,000 of Panama's 4 million citizens live in poverty, Cortizo said: "What a tremendous responsibility we have to those who have been left behind."

Cortizo inherits a slowing economy and growing frustration among Panamanians about official corruption. The economy grew 3.7 per cent last year and unemployment reached 6 per cent.

The new president said he would create next week a Unit for the Competitiveness of International Services to make sure Panama is the top business services and logistics centre in Latin America.

US Commerce Secretary Wilbur Ross and the presidents of Colombia, Peru, Bolivia and the Dominican Republic were among those at Cortizo's inauguration ceremony.

Ross said he had met with him on Sunday and discussed a desire to grow their economies together.

Australian Associated Press