Panama’s economic activity grew in February at its fastest pace in two years. But this accelerated pace is fueling fears of a rise in inflationary pressures.

On Tuesday, the Panamanian government informed that the country’s economy showed 9.9 percent growth this past February, as compared to February of 2010.

The strong economic growth, which is expected to ascend to upwards of 7 percent by year’s end, is generating pressure on the side of inflation. This past march, inflation accelerated to 5.5 percent; its highest rate in over two years.

Meanwhile, the College of Economists of Panama has warned that a combination of sustained high oil prices and the government’s expenditure plans is likely to create a risk of inflation pressure between 6 and 7 percent this year.

Panama’s economy grew by 7.5 percent in 2010, one of the highest rates in Latin America, thanks to booming activity in the free trade area of the country.

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UDPATE 1-Panama economic activity grows 6.8 pct in April