Inflation in Uruguay climbed 1.9% in January totalling 8.72% in the last twelve months, according to the latest release from the government’s stats office, INE. Last year twelve month inflation reached 7.48% and for this year the government established a target of 4% to 6%.
The Central bank survey among local economists was expecting a 1.1% increase in January which was simply insufficient vis-à-vis the final result. Housing (rent, taxes and power represented a 7.21% increase followed by food and beverage with 1.58%, mainly beef cuts and bakery products, and transport, 1.52%.
Uruguayan president Jose Mujica last week warned about the budget situation and said that “not containing inflation is to harm the weaker elements of society who can’t ‘re-label’ prices as happens in stores, groceries and supermarkets”. He added that his administration is openly combating inflation appealing to all available resources against inflation because “we simply can’t let this happen because it only harms the labour force”.
Last December the central bank decided to lift the basic rate to 9.15%, also as part of the effort to contain credit and help with inflation.