Panama Sees Inflation Grow 1.5% in 2023

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By Marco Echevarria

The Consumer Price Index (CPI) recorded a growth of 0.1% in December 2023, compared to the previous month.

The inflation rate in Panama closed December 2023 with an annual cumulative of 1.5 percent, bringing the year-on-year to 1.9 %, driven by increases in the price of services and education, according to data from the National Institute of Statistics and Census (Inec) released on Tuesday.

The Consumer Price Index (CPI) recorded a 0.1 per cent growth in December 2023, compared to the previous month, pushed by rises in groups of restaurants and hotels (1 per cent); food and non-alcoholic beverages (0.5 per cent); alcoholic beverages and tobacco (0.3 per cent); miscellaneous goods and services (0.2 per cent) and housing, water, electricity and gas (0.1 per cent).

The year-on-year variation of 1.9 per cent as of December 2023 was driven by increases in housing, water, electricity and gas groups by 9.9 per cent; education (3.7 per cent); miscellaneous goods and services (3.6 per cent); food and non-alcoholic beverages (2.4 per cent); alcoholic beverages and tobacco (2.3 per cent); restaurants and hotels (2.1 per cent); health (1.3 per cent); and transport (1.1 per cent).

In January last year, Inec explained that the completion of an extraordinary subsidy to the electricity rate due to the covine-19 pandemic shot 39.6 percent of the CPI in the electricity class that month, one of the 8 that make up the housing, water, electricity and gas group.

This 2024 has also begun with an increase in electricity prices, of between 2 % and 15 %, which is expected to have an impact on inflation this year, which according to forecasts from the UN Department of Economic and Social Affairs will reach 2.2 per cent.

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Inflation in Panama closed 2022 with an annual variation of 2.1% and a cumulative variation between January and December of 2.9 per cent, while the 2021 inflation was 2.6 per cent and 1.6 per cent, respectively.

The results of recent years contrast with the variation of -1.6% in 2020, a year of almost total economic paralysis due to the pandemic, the -0.4 % accumulated between January and December 2019 and 0.8% in 2018, according to official figures.

This article has been translated from the original which first appeared in Panamerica