What Price Control Really Generates

The price control policy of the basic basket that has been implemented in Panama for some years is discouraging the local production of goods, since it is not profitable for companies to produce at a price lower than the balance price.

Thursday, April 11, 2019

The measure to regulate the maximum retail prices of 22 products of the basic basket, began in 2014 and its validity has been renewed each semester, with its last extension in January of this year.

See "Price control: From Temporary to Permanent

Augusto Jiménez, producer of Tierras Altas, explained to Panamaamerica.com.pa that "... Price Control has served as a political proposal because in reality it has been a total failure. It has affected production, 'the only way to lower prices is to raise productivity. There is little supply, the price is controlled and traders are managed under a margin."

The article reviews that "... According to an IDB study, 'Price Control is a distortion because it does not allow free interaction between supply and demand to achieve balance in price and quantity.

For the Inter-American Development Bank (IDB), the policy of price regulation generates that at a price lower than the balance price, less quantity is produced, because it is not profitable for some producers to continue producing at that price.

Download IDB report "Inflation and income distribution in Panama".

Do you need more information about your business sector?

Request more information:








this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423


More on this topic

Price Control: More Products Will Be Excluded

November 2019

At the beginning of the Cortizo administration the quantity of products with controlled prices in Panama was reduced from 22 to 14, and from January 1, 2020 the list will decrease to 7.

The gradual elimination of price control has been one of the actions that has strengthened the Cortizo administration, because since July 7, eggs, macaroni, beans, lentils, chop, marrow, breast and tuna, ceased to be part of the list of products, whose prices are controlled.

Price control: From Temporary to Permanent

January 2019

The measure initially defined as transitory, became permanent in Panama, since the beginning of the Varela administration has been extended nine times, leaving negative balances in some sectors.

Juan Carlos Varela will close his administration with a new extension of the controversial measure that regulates the prices of 22 products of the basic basket, affecting several sectors, including meat producers, who report economic losses.

Price Controls Now Permanent in Panama

July 2017

The measure, which initially was to last for only six months, was extended until December 2017, meaning that price controls on 22 products in the basic basket will have been in place for a total of three years.

Some of the 22 products whose prices have been regulated since July 2014 are eggs, chicken, potatoes, macaroni and pork chops, among others.

Price Controls Continues in Panama

June 2015

Price controls will be extended for six months, and authorities are contemplating including in the list of regulated goods coffee, pasteurized milk, sugar, and oil.

The Price Adjustment Committee has recommended that the 22 products under price regulation be maintained, and that 4 more be included.

 close (x)

Receive more news about Retail

Suscribe FOR FREE to CentralAmericaDATA EXPRESS.
The most important news of Central America, every day.

Type in your e-mail address:

* Al suscribirse, estará aceptando los terminos y condiciones


Gluten-free food business for sale

Operating Company dedicated to the manufacture of gluten-free and sugar-free products, OHNE brand.
The OHNE brand has 8 product lines: square bread, sweet...

Stock Indexes

(Apr 6)
Dow Jones
-5.60%
S&P 500
-5.10%
Nasdaq
-5.64%

Commodities

(Feb 24)
Brent Crude Oil
55.420
Coffee "C"
105.85
Gold
1,674
Silver
18.705