Inflation in Panama up to 3.6%

Inflation Panama up to 3.6%
The consumer price index (IPC) continues to break records: In October it reached 3.6%. Inflation has not been this high since 1982, during the Noriega, when the figure reached 4.2%, according to the Comptroller of the Republic. During the last 20 years, the IPC was never higher than 2%. Price changes have been induced by the higher cost of fuel, which in October reached $4 per gallon. The price of the so-called canasta basica, a fixed package of basic consumer goods, went up to $204.52, higher than has ever been recorded by the Ministry of Economy and Finance. (Source: La Prensa)

My Comments:
Panama has a significant advantage to controlling inflation over most other countries. It does not print money. It uses the U.S. dollar as its currency. Inflation is  a direct result of printing money which is why Panama has had such low inflation for 20 years. As it says above, the large increases are due to  inflated oil prices which has dramatically affected steel and other building materials.

As a builder here in Panama I have seen significant increases in material costs in the last few years. When coupled with the increases in labor costs and taxes, it is seriously eroding our ability to be competitive in the international market. When we began constructing homes in 2000 we were able to build in the high $40 a square foot for homes without insulation, heating or air. (We are in the highlands). Now we are looking at the mid $50's for the same type of homes. This is still well below building costs in the U.S. but we are not so much competing with U.S. home-builders as we are with other international destinations. I will have more quantitative data in an upcoming report on the true costs of construction.