Macroeconomic Forecast Panama

Urban consumer price inflation slowed to 5.4% y-o-y in July 2011, down from 6.5% y-o-y in June. This will be welcome news to the Panamanian authorities as June's reading marked the highest pace of growth since 2008, implying the economy was beginning to overheat, and since the economy remains dollarized there are very few means by which the authorities can control inflationary pressures. We expect the slowdown in price growth to continue in the coming months in line with our end-2011 inflation forecast of 4.9%

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