Panama: Inflation accelerates in June for a fifth consecutive month
July 13, 2011
In June, consumer prices added 0.15% over the previous month, below the 0.37% increase observed in May. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly price rise reflected an increase in transportation costs (+1.1% month-on-month) due to higher car insurance prices. As a result, annual headline inflation continued to increase and inched up from 6.4% in May to 6.5% in June, reaching its highest level since December 2008 and moving further above historically low inflation levels. Panama registered an average inflation rate of 1.3% in the 15 years prior to the price surge that commenced in May 2007 and peaked at 10.0% in September 2008. In the country's dollarized economy, authorities do not have the freedom to use monetary policy or exchange rate adjustments to reduce inflation.