Panama: Consumer prices register record decline in February
March 13, 2015
In February, consumer prices decreased 0.78% over the previous month, which contrasted the marginal 0.06% increase recorded in January. According to the National Comptroller’s Office (Contraloria General de la Republica), the monthly decrease in February was driven by substantial declines in several categories, including healthcare, housing and utilities, and alcoholic beverages and tobacco. Price pressures in the food and beverages category continue to be kept in check by the price control system for basic products that President Juan Carlos Varela introduced in July last year.
Annual consumer prices swung from a 0.9% increase in January to a 0.4% decrease in February, which marked a multi-year low. The price control system and falling oil prices are pushing inflation down toward 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.
Author: Carl Kelly, Economist