Macroeconomic Forecast Panama

BMI View: Consumer price inflation in Panama rose to the highest level since December 2008 in February, coming in at 5.0% y-o-y, from 4.8% in January. This translates to a month-on-month growth of 0.4% and 0.7% in these two months respectively. With the US Federal Reserve highly unlikely to hike interest rates until 2012, we see upside risks to our forecast for inflation to hit 4.9% y-o-y at end-2011, given that demand-pull and cost-push pressures in the dollarised economy are mounting.

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