Panama’s inflation rate is projected to remain the lowest in Latin America through 2026, according to the International Monetary Fund (IMF). The IMF forecasts a modest inflation rate of 0.7% for Panama in 2025, rising slightly to 2.0% in 2026. This projection highlights Panama’s continued economic resilience at a time when inflation across Latin America remains a major concern.
This economic stability sharply contrasts with expected inflation rates in other Latin American countries. Nations such as Brazil, Uruguay, Guatemala, Chile, and Mexico are anticipated to face inflation rates exceeding 5% over the same period. Panama’s inflation rate stands out as a regional outlier, offering a strong case study in monetary discipline and structural strength.
The IMF attributes Panama’s low inflation to several contributing factors. Chief among them is Panama’s dollarized economy, which limits exchange rate volatility and provides a stable monetary framework. Additionally, the country’s prudent fiscal policies and strong governance in economic management continue to support investor confidence. Key sectors like the Panama Canal, financial services, and logistics play a vital role in sustaining national income and economic performance.
Economist Juan Jované emphasizes that while Panama’s use of the U.S. dollar is a stabilizing factor, external forces—particularly U.S. monetary policy—can impact domestic prices. Nevertheless, Panama has mitigated internal inflationary pressures effectively by managing supply chain challenges and leveraging imports to meet domestic demand.
While Panama’s inflation rate remains low overall, some citizens report rising prices for everyday goods. This underlines the need for ongoing oversight and responsive policy measures to ensure that all residents benefit from the country’s economic stability.
For more insights on Panama’s economy, visit Panama Perspective.