MercoPress. South Atlantic News Agency

May inflation in Uruguay up 0.87% and 4.10% in 2008

Consumer prices in Uruguay during May increased 0.87%, accumulating 4.10% in the first five months of 2008, according to the country's Statistics Institute (INE), latest release. The index is higher than the average forecasted by 28 Central Bank consultants that anticipated 0.7%.

The items which recorded higher variations were: food and beverage, housing, transport and communications. In the first item prices increased 1.15% with fresh fruit recording the highest on average, 17.98%. Rice also jumped 14% in May compared to April. Housing was up 1.4% in May pushed mainly by public utility rates and heating fuel: cooking gas increased 19.91%; butane gas 4.07%; kerosene 3.33%. Fuel prices also had an impact on Transport and Communications, up 1.02% with car fuel increasing 2.98% in May, plus car registry, 2.68% and taxi fares, 0.83%. The May 2008 CPI was higher than a year ago, 0.76%, and in the last twelve months to May 2008 reached 7.20%, which is above the Uruguayan Central Bank target that expects consumer inflation in the twelve months of 2008 to be in the range of 3 to 7%. Uruguay which has no fossil energy is completely dependent on imports, --and international ballooning prices--, for fuel. The government has been trying to moderate the impact of the oil barrel price with modest monthly increases. As to electricity with sufficient rainfall, Uruguay can even generate a surplus, but an extended drought left the country's four main dams with insufficient water in the reservoirs. Mid May rains in the basins is only beginning to sip into the dams' lakes but electricity consumption restrictions remain effective.