MercoPress. South Atlantic News Agency

Inflation in Uruguay bounces back.

After nine consecutive years of systematic reduction of inflation, year 2000 ended in Uruguay with a 5,05% index, almost a whole point above the '99 record of 4,17%.However Uruguayan officials indicated that after a dreadful year, retail prices kept to the pre established target in the range of 4 to 6%. "Our lack of competitiveness, oil prices, the foot and mouth crisis, a particularly strong dollar, plus regional trade difficulties turned 2000 into the worst year since 1983", said Ariel Davrieux, head of the Uruguayan Budget and Planning Office. Particularly influential in the final outcome of oil dependent Uruguay were fuel prices that increased an average 35% in 2000. But in spite of the adverse inflation, foreign trade, budget deficit, Uruguayan officials sounded optimistic since the local currency, experienced a 7,43% devaluation against the dollar making "Uruguayan costs drop and therefore increasing our competitiveness". "Besides the Euro has recovered 15% against the dollar in the last two months making our exports a 15% more accessible to Europeans", indicated Mr. Davrieux. Mr. Davrieux also identified two other positive factors for the export driven recovery of the Uruguayan economy. "Oil prices will not repeat the terrible experience of 2000 and after a few months ban we've recovered our beef markets".