President Juan Carlos Varela has announced that he will implement price controls on 22 food products in Panama, beginning July 7. The controls will affect items such as rice, milk, bread, eggs, chicken, and topside steak.
The implementation of controls on food prices was a central policy of Varela’s recent campaign platform. While Varela is generally a free-market conservative, his decision to impose price controls is seen as a reaction to rising inflation. While general annual inflation in Panama sits at 3.2% in May, annual inflation for food items sits at 4.7%.
The price controls has been cause for concern among the private business sector in Panama. The Panamanian economy is generally seen to embrace free-market principles. The concern though, may be put to rest by the fact that Varela is restricted in the legislative assembly where his party only holds a minority government, forcing them to negotiate with the more free-market orientated Democratic Change party (of whose former government Varela had served as vice-president in prior to his recent election).