Economic activity and inflation marching in step

(PanamaNewsRoom) While Panama's economic activity continues to climb, concerns are growing about a parallel increase in inflation.

The sunshine news shows that economic activity in November of 2010 was up by 9.52 percent over the same month in 2009, but the cloud on the horizon is the jump cost of the "canasta básica," (the estimated cost to feed a family for a month). It was up by 6 percent from in December to $282.81 from $276 in December 2009. But inflation is speeding up, with a growth of one percent from November to December last year.
The transportation and telecommunications sector contributed the happy economic figures due to the transit of ships through the Panama Canal and activity at the railroad, and commercial activity in the Colon Free Zone, was bubbling along.
The government estimates that when the final figures are ingrowth for 2010 will be registered at 7 percent.

But reports by the Ministry of Economy and Finance showed that 52 percent of the products that make up thebasic food basket were higher in December 2010 than they were in December 2009. Of the remaining items, 26 percent had lower prices and 22 percent were unchanged.
The basket includes items such as rice, vegetables, fruits, meats, milk and eggs.

The heavy rains have and flooding have further hampered agricultural products, including milk, and items like coffee, where the harvest has been massively delpeted are expected to rise by 30 percent or more in the  coming months.
Adding to fears are the continuing sharp increases in gas prices, with forecaster predicting premium gas at $4 a gallon in coming months, Prices have risen three times this year.