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Panama Inflation March 2023

Panama: Inflation decreases in March

Inflation dropped to 1.3% in March below February’s 2.0%. March’s figure represented the weakest inflation rate since March 2021. Looking at the details of the release, prices for food and non-alcoholic beverages rose at a slower pace in March, while prices for clothing and transport contracted at a sharper pace.

Accordingly, the trend pointed down slightly, with annual average inflation coming in at 2.7% in March (February: 2.8%).

Finally, consumer prices rose 0.18% in March over the previous month, accelerating from February’s 0.03% increase.

Looking ahead, inflation should remain subdued in the next months: Commodities prices are staying constant, supply-chain disruptions are further normalizing, and the government prolonged the fuel subsidy in April for a fourth time, until 31 May. That said, dynamic domestic demand growth and the removal of the fuel subsidy in H2 pose upside risks to inflation. Accordingly, a key factor to watch includes renewed social unrest—if inflation rises further—which could lead the government to maintain support for longer.

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