Panama's Inflation Rate Highest in 14 Years

Nov. 15 (Bloomberg) -- Panama's inflation rose at the fastest pace in more than 14 years last month because of increased costs for transportation and housing and utilities.

Consumer prices climbed 5.5 percent in October from the same month a year earlier, and rose 0.5 percent from September, the country's statistics agency said today on its Web site.

Near-record prices for oil are increasing the costs of transportation, and higher prices for electricity and natural gas and also fueling inflation. Increased consumption is also being fueled by economic growth, which reached 9.6 percent in the second quarter, boosted by 18.5 percent expansion of the construction industry.

Inflation may end the year at 6 percent, said Frank de Lima, an independent financial analyst in Panama City who was an economic adviser to the government from 1999 to 2004. The declining value of the U.S. dollar against other currencies is increasing the costs of imports, he said today in an interview.

The government said yesterday that gasoline stations will raise fuel prices by 19 cents to 23 cents a gallon. The operator of the Corredor Sur, Panama City's main highway, announced today that toll prices will increase 10 percent, putting further pressure on transportation costs.

To contact the reporter on this story: Carlos Barletta in Mexico City at