Macroeconomic Forecast Panama

Urban consumer price inflation in Panama reached 6.5% y-o-y in June 2011,up from 6.4% in May and 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, meaning 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

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