Panama: Inflation stabilizes at multi-year low in February
March 12, 2014
In February, consumer prices rose 0.53% over the previous month, which came in above the 0.20% increase recorded in January. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly increase was driven by a large jump in prices for education. Prices for household items and food and beverages also moved higher. Annual inflation stabilized at January's 3.4% in February, which marked the lowest level since June 2010. However, inflation remains above 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. FocusEconomics Consensus Forecast panelists expect inflation to reach 4.1% by the end of 2014, which is unchanged from last month's forecast. For 2015, the panel sees inflation at 4.0%.
Author: Carl Kelly, Economist