MercoPress. South Atlantic News Agency

October surprise in Uruguay: retail prices drop 0.23%

The consumers' prices index, CPI in Uruguay dropped 0.23% in October pushed down by the significant decrease in urban transport rates and health costs, both government managed prices.

According to Uruguay's Statistics Institute this is the first time this year that consumer prices back-step following the steep rise of August. CPI in the ten months of 2007 now stands at 8.42% and in the last twelve months, 8.87%. However in both cases it's above the government's target for the whole of the year in the range of 4.5 and 6.5%. October's good showing according to the Statistics Institute was based on the significant negative showings in transport and communications, 3.02%; health care 3.85%; housing 0.5% and leisure 0.07%. The fall back in prices could have been greater had it not been for the hike in food and beverage, 2.28% boosted mainly by the price of wheat flour. Transport and communications decrease was influenced by the several anti inflation measures decided last month by the Uruguayan government which helped the urban transport rate to fall 9.15% and long range passenger transport, 2.84%. A slight drop in fuel prices and a stronger Uruguayan currency also contributed. However members of the opposition said that the CPI figures are misleading because they do not coincide with overall soaring prices and the inflation factor. "The CPI is a mathematical equation which depends on the items included. Inflation is when people feel prices are constantly rising", said opposition leader Senator Jorge Larrañaga. Another encouraging index for the Uruguayan administration of President Tabare Vazquez is that unemployment in the last quarter dropped to 9%. According to the Statistics Institute unemployment dropped from 9.5% in the second quarter to 9% in the third quarter, however in September the index actually rose to 8.8%, 0.3 percentage points higher than in August. So far this year unemployment has been showing a gradual descent from 9.9% in the first quarter to 9.5% in the second and 9% in the third quarter. But the overall employment rate dropped from 57.3% in August to 55.1% in September.