Macroeconomic Forecast Panama

September's urban consumer price inflation ticked up to 6.1% y-o-y, from 5.3% y-o-y in August, and has broken out of the recent two-month trend of moderating price growth. While this figure might worry the Panamanian authorities, as they have little ability to control inflationary pressures in their dollarized economy, we believe price growth will slow in coming months and are sticking to our end-2011 inflation forecast of 4.9% y-o-y.

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