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The expected reduction in inflation in Panama is arriving. The Comptroller General of Panama released figures that show an adjusted yearly inflation rate of 4.3 for February of 2009. The fall in oil prices has translated to lower electric and gasoline costs. However, many consumer items, including food have risen. Panama real estate, however, has come down in price slightly.

Historically Panama has not had much panama inflation. However, in the last few years the “canasta basica” which is Panama’s “basket” or cost of basic food items went up substantially. Of course, with the rise in oil prices gasoline went over $4 a gallon and electric costs went up substantially causing the government to subsidize home electric bills for much of 2008.

Inflation, Panama Real Estate, Panama Investment

Panama real estate and Panama Investment is taking a little pause on the high end as “Norte Americanos” are staying home in large numbers to deal with credit concerns and the recession. Thus those with ready cash can pick up some good deals, prices from last year or the year before. Local bilingual realtors such as ABPanama are still seeing brisk business as multinationals locate in Panama move staff to Panama. Also the number of tourists-becoming-residents-becoming-investors from Great Britain, Spain, and the rest of the Continent has increased in the last year or so.

Panama investment continues at its high pace. Panama has for years had the highest rate of investment per capita in Latin America. It is investment that has provided jobs and reduced the level of poverty in Panama. It is investment that put money in people’s pockets in Panama and, to a degree, driven inflation.

There has been a drop off in car sales and other higher end consumer items but the malls are full and traffic jams are still the order of the day on Calle 50, Via España, and Transismica. People in Panama still have money in their pockets and are still spending, although they are holding off on high priced consumer items, to a point. Wide screen plasma TV sets are still walking out of the stores in Panama’s malls.

The Future of Panama Investment, Real Estate, and Inflation

Panama is investing in its future with a national road building campaign to connect remote parts of the country to Panama’s central infrastructure. The Panama Canal Expansion is going forward with the bidding for the multibillion dollar locks as the cornerstone of the project.

Real estate prices have not fallen through the floor as they have in some parts of Costa Rica. As the recession lessens expect to see Panama’s economic and real estate boom resume with a vengeance.

A average of predictions gives a 4 percent inflation rate in Panama for 2009 and a growth rate of about 5 percent. In many ways the initial conditions for Panama’s ten year old real estate boom have been recreated with lower prices, cheap land, and a democratic government in a tropical paradise.

Elections are coming up in May, by the way, and politicking is fierce. To think this country had a military dictator twenty years ago is amazing looking at the boisterous exchange of ideas that is Panama today.

If you are interested in Panama real estate investment come to see us at ABPanama where we have over twenty-three years experience managing real estate portfolios and do business throughout Panama.