Panama: Inflation stable in May
June 12, 2013
In May, consumer prices rose 0.41% over the previous month, which came in above the 0.34% increase recorded in April. According to the National Comptroller's Office (Contraloria General de la Republica), the monthly increase mainly reflected higher prices for recreation and culture as well as for health services.
Despite the monthly increase, annual headline inflation remained stable at 3.7% in May, the lowest level seen since August 2010. In spite of having moderated in recent months, inflation remains above the country's historically low levels. In the country's dollarized economy, authorities lack the freedom to use monetary policy or exchange rate adjustments to reduce inflation.
FocusEconomics Consensus Forecast panellists expect inflation to reach 4.5% by the end of this year, which is down 0.1 percentage points from last month's forecast. For 2014, the panel sees inflation inching down to 4.5%.