MercoPress. South Atlantic News Agency

Uruguay’s May consumer inflation 0.16%

Economy Minister Fernando Lorenzo

Uruguay’s consumer prices rose in May at the slowest pace in six months amid falling costs for entertainment, transport and communication, according to the national statistics institute, INE. However the accumulated of the last twelve months is above target.

Prices rose 0.16% from April, said INE in the monthly release. A Central bank survey of 27 economists had forecast a monthly increase of 0.33%. From a year earlier, prices rose 7.09%, higher than the central bank’s target of 3 to 7% for this year.

Price increases may pick up as unions push for wage increases amid an economy that may grow 5.4% this year, anticipated Ramon Pampin, a local economist. The average of 19 forecasts in a May Central bank survey of economists estimates 2010 growth of 5.2%.

Economy Minister Fernando Lorenzo said in a May 28 interview that the government will seek to keep wage increases within a range of 3 to 7%.

Uruguay’s central bank held its benchmark overnight rate at 6.25% in March while signaling that inflation pressures may increase. The country’s monetary policy committee next meets June 21.

Uruguay’s (32 billion USD) GDP grew 2.1% in the fourth quarter from the previous three-month period and 4.5% from same quarter of 2008, the central bank reported March 24. Unemployment in March held steady at 7.5%.