Ricardo Martinelli, presidential candidate of Panama's Alliance for Change party, votes during national elections Sunday. (Esteban Felix/Associated Press)A conservative supermarket magnate won Panama's presidential election Sunday, according to the country's electoral tribunal, and will oversee expansion of the Panama Canal, the country's economic engine.

Tribunal president Erasmo Pinilla said that with 44 per cent of the votes counted, Ricardo Martinelli is the "indisputable winner" of Sunday's voting.

Martinelli, of the opposition Alliance for Change, topped former housing minister Balbina Herrera of Panama's governing coalition, which is led by the Democratic Revolutionary party.

Pinilla said he telephoned Martinelli to inform him of his victory.

Martinelli, whose term will end in 2014, will guide Panama through the world economic crisis and the $5.25-billion US expansion of the canal to increase its capacity and accommodate larger ships.

Few problems were reported despite heavy turnout at the country's 2,382 voting stations, observers from the Organization of American States said in a preliminary report issued after polls closed. Early returns were expected late Sunday.

The candidates cast their ballots and talked of unity, regardless of the outcome.

"I believe in God and the Panamanian people," Herrera said at a school in the capital.

"Both winners and losers must work to improve the country," Martinelli said. "Our problems don't end with an election."

The winner takes office July 1, replacing President Martin Torrijos.

Candidates support canal expansion

Both Martinelli, 57, and Herrera, 54, supported the canal expansion, but recent world economic woes have generated uncertainty over the project, which is receiving $2.3 billion US in international financing.

The canal project, which was approved in a 2006 referendum, is expected to create about 5,000 direct jobs in the small Central American nation between 2010 and 2011, when construction will be at its peak, according to authorities.

The project would be "one of the points most closely attended to" by a Martinelli government, said Roberto Henriquez, vice-president of Martinelli's political party.

Balbina Herrera, presidential candidate of the Democratic Revolutionary party, talks to reporters in Panama City after voting in Sunday's elections. (Arnulfo Franco/Associated Press) Herrera had promised to "expand the canal satisfactorily in the programmed amount of time" and spread the capital's wealth to the rest of the country.

"My responsibility is to make the growth generated by the capital through the inter-oceanic canal reach the provinces and indigenous peoples," she said.

Economic growth will shrink

Panama's economy grew by an annual average of 8.7 per cent over the past five years, and unemployment fell to 5.6 per cent from 12 per cent. The growth was fuelled by foreign and state investment by the outgoing government of Torrijos.

Growth this year is projected to be three to four per cent.

In an April poll, about 50 per cent of likely voters surveyed said they planned to vote for Martinelli, owner of Panama's largest supermarket chain, Super 99. Herrera earned 38 per cent support.

The poll, conducted by Unimer Research International and published by Panama City's La Prensa newspaper, surveyed 1,600 Panamanians and had a sampling error margin of 2.5 percentage points. Earlier polls also suggested an advantage for Martinelli.

Guillermo Endara, a longshot candidate who served as president from 1989 to 1994, also ran for president.

Panamanians also elected a vice-president, members of Congress, mayors and other local officials. More than 2.2 million people were eligible to vote, and the Electoral Tribunal expected a turnout of more than 75 per cent.