That depends on where you are going to live.
Panama City is actually the 3rd most expensive city in Latin America according to this article reflecting the high standard of living. But in our experience Costa Rica's San Jose is even more expensive so we're not quite sure how Panama ended up so high.
Like in any capital city, there are expensive and less-expensive neighbourhoods. Outside the city, especially on the country side, live is a lot cheaper.  But in general, be prepared to budget at least $ 2000,-- a month to have a nice comfortable live in Panama as a foreigner.