Panama Inflation

Panama

Panama: Consumer prices remain stable at historical-low in October

November 13, 2015

In October, consumer prices dropped 0.10% over the previous month, which came in above September’s 0.48% drop (previously reported: -0.39% month-on-month). According to the National Comptroller’s Office (Contraloría General de la República), three of the twelve categories surveyed reported a drop. The biggest drops were reported by the transportation, communication, and alcoholic beverages and tobacco components. However, the drop was offset by gains in five components of the survey.

Consumer prices fell 0.4% in annual terms in October, which matched September’s reading. October’s reading represents the third time this year that inflation has tallied minus 0.4%—the lowest reading ever recorded. Inflation has remained at historically-low levels thanks to a price control system and falling oil prices. Nevertheless, inflation is expected to pick up moderately after December when the government is expected to remove the price control system that has been in place since 2014. 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 1.1% by the end of 2015, which is down 1.4 percentage points from last month’s forecast. For 2016, the panel sees inflation at 1.8%, which is down 1.3 percentage points from last month’s forecast.


Author: Jean-Philippe Pourcelot, Economist

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Panama Inflation Chart


Panama Inflation October 2015

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


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