Panama Inflation


Panama: Consumer prices drop once again in September

October 13, 2015

In September, consumer prices dropped 0.48% over the previous month, which came in below August’s 0.39% drop. According to the National Comptroller’s Office (Contraloría General de la República), the monthly reading was largely the result of a decrease in the prices for transportation as well as for clothing and footwear. The price control system that President Juan Carlos Varela introduced in July of last year continues to keep price pressures for basic goods in check.

Consumer prices in September dropped 0.4% over the same month last year, which contrasted the 0.4% increase observed in August. September’s result marked the lowest reading in seven months. The price control system and falling oil prices are keeping inflation at historically-low levels. Due to the country’s dollarized economy, authorities lack the freedom to use monetary policy or exchange rate adjustments to influence inflation.

Panelists participating in the LatinFocus Consensus Forecast expect inflation to reach 2.5% by the end of 2015, which is down 0.2 percentage points from last month’s forecast. For 2016, the panel sees inflation at 3.1%.

Author: Jean-Philippe Pourcelot, Economist

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Panama Inflation Chart

Panama Inflation September 2015

Note: Annual variation of consumer price index in %.
Source: National Comptroller’s Office and FocusEconomics calculations. The National Comptroller’s Office revised their methodology for calculating the consumer price index and changed the base year from October 2002 to 2013. The annual variation for November 2014 was not provided. Historical data refer to the old base year.

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