Panama: Inflation continues to moderate in August
September 13, 2011
In August, consumer prices added 0.45% over the previous month, well above the 0.07% increase observed in July. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly price rise mainly reflected price increases in food and beverages, as well as in transport. Owing to the price spike in the same month last year, annual headline inflation inched down from 5.4% in July to 5.3% in August, declining for the second time since the beginning of this year. Nonetheless, the inflation rate remains well above historically low levels. Panama registered an average inflation rate of 1.3% during 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 lack the freedom to use monetary policy or exchange rate adjustments to reduce inflation.