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Panama Inflation August 2022

Panama: Inflation falls to over one-year low in August

Inflation eased to 2.1% in August from July’s 3.5%. August’s figure marked the lowest inflation rate since June 2021. A sharp deceleration in price pressures for transport largely explained the reading, following a drop in crude prices in August.

Annual average inflation remained at July’s 3.2% in August. Finally, consumer prices fell 1.35% in August over the previous month, a sharper drop than July’s 1.24% decrease.

Going ahead, our panelists expect inflation to pick up again by the end of the year. The August print was distorted by a base effect, as is clear from the more marginal change seen in month-on-month inflation. Economic growth—set to be the fastest in Central America this year—should bolster price pressures. That said, inflation is unlikely to return to the over nine-year high seen in June thanks to the government’s price cap on gasoline and diesel, which is to remain in place until January 2023.

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