MercoPress. South Atlantic News Agency

Uruguay January prices pick up again and reach 0.93%

Medical costs were among the items with highest increases

Prices in Uruguay surprised in January, showing signs of picking up again, driven in large part by higher medical costs, the latest salaries agreements and dearer vegetables according to data published earlier this week.

The Uruguayan consumer price index increased by 0.93% in January, from December, while the CPI has risen by 6.05% over the last 12 months, the national statistics institute, INE, said in a statement.

The increase was higher than the 0.79% registered a year ago, while the 12-month figure was below the 9.21% registered this time last year. Nevertheless, 12-month inflation was up from 5.9% registered at the end of December.

Analysts had been expecting a lower figure of a 0.62% in January, according to the median estimate in the Uruguayan central bank's monthly survey of 27 market participants, carried out last month.

In the same survey, analysts had lowered their expectations for inflation for the full year 2010 to 6%, compared with 6.11% in the December survey. The Central bank’s target for the next 18 months (June 2011) is between 4 and 6%.

A large increase in medical and health services appeared to be the main reason for the increase in January. Those prices rose by 3.25% in January, compared with 0.9% a year ago, according to INE.

A number of major health items increased in January, including a 4.65% increase in health provider charges, a 4.88% increase in prescriptions and a 4.14% increase in drugs.

The annual adjustment of nominal salaries for government employees and some important private sectors also had an incidence in January’s inflation index. Another item was fresh vegetables, beef and wheat flour produce such as bread and pasta.

A parallel index for low income families which is surveyed by the Statistics Office from the National University School of Economics indicates that January prices soared 1.09%, although below the 1.19% of January 2009. In the twelve months to January 2010 the index reached 7.18%.

The highest increases correspond to medical costs, 2.28%; food and beverage, 1.62% and leisure 5.26% (coinciding with the high summer season). At the other end Clothing and foot wear was down 1.71% (end of the year sales) and transport and communications (cheaper fuel).