Macroeconomic Forecast Panama

BMI View: Year-on-year inflation ticked up to 3.23% y-o-y in July from 2.13% in June. As a net importer of oil Panama has been particularly vulnerable to the rise in world oil prices, which saw year-end inflation reach 2.9% at the end of 2005, an unprecedented figure for a dollarised economy historically used to inflation of between 1.0% and 1.5%. We expect year-end inflation to remain high, at around 2.5% for the forecast period 2006-2007.

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