Panama: Inflation continues to accelerate in March
April 13, 2011
In March, consumer prices added 0.91% over the previous month, well above the 0.38% increase observed in February. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly increase reflected higher transportation costs due to the rising price of gasoline as well as higher prices for education. Annual headline inflation jumped from 5.0% in February to 5.5% in March, 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.