MercoPress. South Atlantic News Agency

Inflation in Uruguay under control

The Uruguayan consumer prices index increased 0,43% last March, with an accumulated twelve months inflation of 5,48% according to the latest release from the country's Statistics Institute, INE. Similar figures a year ago were, 0,6% and 8,38%.

INE points out that the beginning of the school year in March had the largest impact on the month's consumer prices index.

Food and beverage jumped 1,44% in March with special incidence from items such as poultry and several meat cuts.

During the first quarter of 2005 inflation in Uruguay reached 0,8% considered relatively low and in the framework of the annual target of 6 to 7/%.

But analysts point out that the April index will experience a slight acceleration given the recent increase in public utility rates, particularly fuel and electricity.

Nevertheless economist Javier de Haedo, a former Uruguayan Economy Minister said that inflation is not a problem in Uruguay and the latest round of public utilities rates increase is understandable given the world and regional energy situation.

"Besides we've had almost six months of zero inflation, which will enable the country to keep to the original 5,5/7,5% inflation target for 2005".

Last week the Uruguayan Central Bank Monetary Policy Committee established a 5 to 7% inflation target for the twelve months ending March 2006.

Uruguay is currently in talks with the International Monetary Fund for the renewal of the existing program which includes a 3,5 budget primary surplus.