Panama: Inflation closes 2014 at multi-year low
January 15, 2015
In December, consumer prices decreased 0.40% over the previous month, which followed the 0.34% increase recorded in November. According to the National Comptroller’s Office (Contraloria General de la Republica), the monthly decrease in December was driven mainly by a steep drop in prices for transportation due to falling gas prices. Prices for food and beverages registered no change, kept in check by the price control system for basic products that President Juan Carlos Varela introduced in July.
Annual inflation came in at 2.6% for 2014, which was below the 3.7% tallied in 2013. The 2014 figure marked the lowest point since 2009. 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