MercoPress. South Atlantic News Agency

Inflation in Uruguay remains strong, reaches 4.13% in the first six months

Meat and fresh fruit prices were down in June

With a marginal descent, Uruguay’s annual inflation in the twelve months to June reached 8% compared to May’s, 8.06%, but still two percentage points above the Central bank upper cap target.

According to the country’s National Statistics Institute, INE, consumer prices advanced at an annual 8% in June which compares favourably with the same month a year ago when the index was 8.61%.

June’s increase over May was 0.3%, which was considerable lower than the 0.6% average from analysts consulted for the Central bank monthly estimate. In the first six months of the year inflation reached 4.13% which is above the target floor for the whole twelve months.

The same analysts believe annual inflation will reach 7.8% in 2012, which is above the Central bank 4% to 6% target. However in this year’s budget currently under discussion in Parliament the inflation estimate for the next twelve months is 7.6%

In June food and beverage prices again dropped, 1.17% compared to the same month in 2011, making it the item with greatest incidence in the slight drop in monthly inflation. Meat prices fell 3% and fresh fruit 0.65%.

However at the other end the item Transport climbed 2.08%, particularly influenced by the prices of cars, 8.14%; motorcycles, 8.28%; tyres, 8.49%; mechanical repairs and spares, 1.41%; parking, 2.42% and car rentals, 7.92%.

The Uruguayan government also said that in the budget bill this year’s fiscal deficit will reach 1.7% of GDP compared to 1% of GDP last year. Likewise in 2013, fiscal deficit is estimated in 1.4% of GDP (up from 0.9%) and in 2014, 1.2% of GDP (up from 0.8%)