Panama’s high tourist season corresponds with its Pacific-side dry season, from mid-December to mid-April. During these months, there is relatively little rain in Panama City and elsewhere south of the Continental Divide.
North of the mountains, on the Caribbean side of Panama, it rains all year round. However, it tends to rain less in February, March, September and October than it does the rest of the year.
The best time to visit Panama really depends on what you plan to do. If you intend to spend most of your time on the Pacific side, you might want to visit in December or January, when there’s generally little rain and the weather is pleasant. Bear in mind, however, that hotel prices and airfares are generally higher from mid-December to mid-April.
If you’ll be doing any serious hiking, the dry season is the most comfortable time to do it. For planning purposes, be aware that Panama’s mountains can get very cold at night; if you’re considering camping at altitude (in Boquete, El Valle or Cerro Punta, for example), be sure to bring warm clothing.
If you’ll be spending most of your holiday surfing, bear in mind that swells are fairly constant in the Pacific year-round, though offshore winds from December to mid-April can add a few meters to curl. However, Caribbean swells are a bit more fickle, and are usually dependent on weather patterns in the region.
Other outdoor pursuits are also weather dependent. Rafting is at its best is Chiriquí Province from May to December when the rivers are running high, while diving is best from December to mid-April when the dry season lends better visibility.
Some of Panama’s colorful festivals draw enormous crowds, and are well worth attending if you’re in the area. The Península de Azuero is very popular for its Carnaval (Mardi Gras) – the celebrations are held on the four days leading up to Ash Wednesday. Panama City’s Carnaval is also popular (and one of the world’s largest). Hotel reservations during Carnaval are a must and should be made well in advance. Panama has a number of other festivals worth catching, especially on the Península de Azuero.
Official holidays in Panama include January 1 (New Year's Day), January 9 (Martyr's Day), Good Friday, Easter Sunday, May 1 (Labor Day), August 15 (Founding of Old Panama -- observed in Panama City only), October 12 (Hispanic Day), November 2 (All Souls' Day), November 3 (Independence Day), November 4 (Flag Day), November 5 (Colón Day -- observed in the city of Colón only), November 10 (First Call for Independence), November 28 (Independence from Spain), December 8 (Mother's Day), December 25 (Christmas Day).