Panama Inflation May 2016


Inflation moderates in May

In May, consumer prices rose 0.19% month-on-month, which came below April’s 0.50% increase. According to the National Comptroller’s Office (Contraloría General de la República), May's print reflected price increases for 4 of the 12 categories included in the survey. The transportation component tallied the biggest increase while alcoholic beverages and tobacco was the component that dropped the most.

In May, inflation eased from 0.6% in April to 0.3% May’s print marks the lowest reading since December. Inflation has hovered at historically low levels owing to still-low oil prices and a price control system in place until June. Due to the country’s dollarized economy, authorities lack the freedom to use monetary policy or exchange rate adjustments to influence inflation. Meanwhile, annual average inflation remained steady in May at the 0.3% reading tallied in April.

Panelists participating in the FocusEconomics Consensus Forecast expect inflation to reach 1.5% by the end of 2016, which is up 0.2 percentage points from last month’s forecast. For 2017, the panel sees inflation at 2.2%.

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Panama Inflation Chart

Panama Inflation May 2016

Note: Annual variation of consumer price index in %.
Source: National Comptroller’s Office and FocusEconomics calculations

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