Panama: Inflation falls back down to multi-year low in October
November 13, 2014
In October, consumer prices decreased 0.13% over the previous month, which contrasted the 0.33% increase recorded in September. According to the National Comptroller’s Office (Contraloria General de la Republica), the monthly decrease in October was driven mainly by a steep drop in prices for transportation. Prices for food and beverages tallied a negligible rise, kept in check by the price control system for basic products that President Juan Carlos Varela introduced in July.
Annual inflation decreased from 2.3% in September to 2.1% in October, which marked the lowest point in nearly 6 years. The price control system is keeping inflation more in line with historically-low levels. Due to the country’s dollarized economy, authorities lack the freedom to use monetary policy or exchange rate adjustments to reduce inflation.
Author: Carl Kelly, Economist