New Year's Day, or Año Nuevo, is a public holiday in Panama, celebrated on January 1st like in most parts of the world. This holiday offers a fresh new start, marking the first day of the New Year under the Gregorian and Julian calendars. As part of their customary traditions, Panamanians celebrate this day with wonderful festivity and excitement, engaging in fun-filled activities with family and friends.

The celebrations usually begin on New Year's Eve, a time when people gather at public venues, homes of friends or family to witness the countdown and fireworks filling the air at midnight. Traditional Panamanian festivities include music concerts, parades, public parties and dancing till dawn on New Year’s Day. Additionally, it is common to see the 'muñecos' – life-sized dummies typically representing well known figures, which are burned at the strike of midnight as a symbolic gesture to bid adieu to the past year.

On New Year's Day, families usually gather together for a special meal which is one of the main themes of the day. The revelry continues with street parties, traditional music, and food festivals. Often, individuals also spend the day resting and recovering from the prior night's festivities. As a tradition in Panama, people also engage in the act of making New Year resolutions that focus on self-improvement, in anticipation of a promising year ahead.