Panama: Inflation moderates in October
November 13, 2010
In October, consumer prices rose 0.16% over the previous month, which was above September's flat reading. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly increase reflected higher prices for transport as well as for a diverse range of goods and services. Owing to the moderate price increase, annual headline inflation inched down from 4.2% in September to 4.1% in October, ending the upward trend in inflation that resulted in a 19-month high last month. However, the inflation is still far from the moderate levels which have been historically observed. Panama registered an average inflation rate of 1.4% in the 15 years prior to the price surge that commenced in May 2007 and which peaked at 10.0% in September 2008. In the country's dollarized economy, authorities do not have the freedom to use monetary policy or exchange rate adjustments to reduce inflation. The government expects inflation to remain below 3.0% this year.