Panama: Inflation moderates to lowest level in over three years in January
February 12, 2014
In January, consumer prices rose 0.20% over the previous month, which came in just below the 0.27% increase recorded in December. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly increase was driven by higher prices for food and beverages, housing and utilities, and for transport.
Annual inflation moderated from 3.7% in December to 3.4% in January, which marks 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