MercoPress. South Atlantic News Agency

Wholesale prices in Uruguay soar 17.6% in nine months

Uruguay's wholesale prices soared 3.1% in September, pushed by higher agriculture costs admitted the government, bringing overall wholesale inflation for the first nine months of the year to 17.6%, compared to 9.7% in the same period a year ago.

According to the Institute of Statistics wholesale inflation in Uruguay last August reached 4.5%, while a year ago the same index had dropped 1.8%. The item Agriculture, Livestock, Game and Forestry registered the highest increase, 8.5%, boosted by a 20.5% rise in crops. Consumer and wholesale inflation rates in Uruguay have remained high since the beginning of the year mainly because of foreign factors such as the international price of wheat and oil, said government officials. Following a higher than expected consumer inflation last August the Uruguayan government admitted the annual target of 6.5% will be surpassed but forecasted it would remain below 9%. Two digits inflation automatically forces the government to open salary negotiations on a six months basis instead of annually. Last year wholesale inflation in Uruguay was 8.23%. President Tabare Vazquez announced several measures to help contain soaring food prices, among which rising interest rates and lowering monetary expansion. The consumer price index in the first eight months of the year reached 8.2%. Inflation has become a challenge for other Mercosur country-members. In Chile inflation in August climbed 1.1%, the highest in the last twelve months. Inflation in the last twelve months stands at 5%. In Brazil August inflation was 0.47%, double the July percentage. Bolivia's consumer prices index in the first eight months of 2007 stands at 8%, anticipating two digits inflation for the twelve months. However Venezuela leads with 1.1% in August and 9.4% during the first eight months of 2007. In all cases the item Food has ballooned reflecting higher international prices for cereals and other commodities.