Panama Inflation


Panama: Consumer prices increase in May

June 12, 2015

In May, consumer prices increased 0.49% over the previous month, which matched April’s reading. According to the National Comptroller’s Office (Contraloria General de la Republica), the monthly increase in May was driven by higher prices for transportation, food and non-alcoholic beverages, as well as for alcoholic beverages and tobacco. Price pressures for basic goods continue to be kept in check by the price control system that President Juan Carlos Varela introduced in July last year.

Annual consumer prices registered a 0.4% increase in May, which was up from the flat reading tallied in April. This marked the first positive result in four 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.

LatinFocus Consensus Forecast panelists expect inflation to reach 2.6% by the end of 2015, which is unchanged from last month’s forecast. For 2016, the panel sees inflation at 2.9%.

Author:, Economist

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Panama Inflation Chart

Panama Inflation May 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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