Macroeconomic Forecast Panama

BMI View: Urban consumer price inflation in Panama reached 6.4% y-o-y in May 2011, the fastest pace of growth since 2008, an indication that the economy could be showing signs of overheating. This rate of price growth is particularly notable given the economy's dollarised status, as it means the Panamanian authorities have limited means by which to control these pressures. That said, with our Commodities team forecasting global prices to cool in H211, for now we maintain our end-2011 4.9% inflation forecast.

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