UPDATE 1-Panama April economic activity up 9.48 pct

(Recasts; adds analysts' quotes, details, byline)

By Andrew Beatty

PANAMA CITY, June 24 (Reuters) - Panama's economic activity rose 9.48 percent in April over the year-ago period, the government said on Tuesday, rebounding from a near five-year low posted in March.

Growth in the construction, mining, hotel and restaurant sectors were the strongest performers, according to the Comptroller General's office.

Analysts said the figures for March, which on Tuesday were revised upward to 2.2 percent growth from 1.9 percent reported last month, may have been artificially low because of the timing of Easter holidays this year compared to a year earlier.

Analysts said they would wait for May's figures to be released to judge the full impact that global conditions were having on the Panamanian economy.

"May will be much more important," Alejandro Cuadrado, an analyst with Merrill Lynch, told Reuters.

Although the rising prices of fuel and food continue to act as a brake on the economy -- which grew at 11 percent last year and is expected to grow around 8 percent this year -- observers are largely positive about the economic outlook.

"Even with the sharp slowdown in growth in March, first-quarter year-on-year growth reached close to 7 percent and is still quite strong relative to regional growth rates," Theresa Paiz, an analyst with Fitch Ratings told Reuters.

With 12-month inflation running at 8.8 percent investors are watching how Panama, which uses the dollar as its national currency, can bring higher living costs under control.

Last week the government announced a series of measures to cap inflation, including subsidies on fuel and electricity for most consumers. "We will be closely monitoring fiscal trends and the government's policy response in general to contain inflationary pressures," said Paiz.