Panama Inflation

Panama

Panama: Inflation continues to fall at start of 2015

February 20, 2015

In January, consumer prices increased 0.06% over the previous month, which contrasted the 0.40% decrease recorded in December. According to the National Comptroller’s Office (Contraloria General de la Republica), the monthly increase in January was driven mainly by higher prices for housing and utilities. Prices for household goods as well as food and beverages were lower in January compared to the previous month. Price pressures in the food and beverages category have been kept in check by the price control system for basic products that President Juan Carlos Varela introduced in July last year.

Annual inflation decreased from 2.6% in December to 0.9% in January, which marked the lowest reading in more than five years. 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.

LatinFocus Consensus Forecast panelists expect inflation to reach 3.4% by the end of 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, the panel sees inflation at 3.2%.


Author:, Economist

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Panama Inflation January 2015 1

Note: Annual variation of consumer price index in %.
Source: National Comptroller’s Office and FocusEconomics calculations. The National Comptroller’s Office revised their methodology for calculating the consumer price index and changed the base year from October 2002 to 2013. The annual variation for November 2014 was not provided. Historical data refer to the old base year.


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