Panama: Inflation moderates in June
July 16, 2012
In June, consumer prices fell 0.07% over the previous month, which contrasted the 0.42% increase recorded in May. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly figure reflected how lower prices for housing, water, electricity and gas more than offset higher prices across the remaining categories. As a result of the monthly drop, annual headline inflation fell from 6.0% in May to 5.8%, its lowest level in 10 months. Nevertheless, the inflation rate remains well above the country's historically low levels. Panama registered an average inflation rate of 1.3% during the 15 years prior to the price surge that commenced in 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.