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January inflation in Uruguay confirms strong hike tendency

Tuesday, February 5th 2013 - 06:25 UTC
Full article 7 comments
Housing and elements linked to rent and taxes soared the most 7.21% Housing and elements linked to rent and taxes soared the most 7.21%

Inflation in Uruguay climbed 1.9% in January totalling 8.72% in the last twelve months, according to the latest release from the government’s stats office, INE. Last year twelve month inflation reached 7.48% and for this year the government established a target of 4% to 6%.

The Central bank survey among local economists was expecting a 1.1% increase in January which was simply insufficient vis-à-vis the final result. Housing (rent, taxes and power represented a 7.21% increase followed by food and beverage with 1.58%, mainly beef cuts and bakery products, and transport, 1.52%.

Uruguayan president Jose Mujica last week warned about the budget situation and said that “not containing inflation is to harm the weaker elements of society who can’t ‘re-label’ prices as happens in stores, groceries and supermarkets”. He added that his administration is openly combating inflation appealing to all available resources against inflation because “we simply can’t let this happen because it only harms the labour force”.

Last December the central bank decided to lift the basic rate to 9.15%, also as part of the effort to contain credit and help with inflation.

Categories: Economy, Uruguay.

Top Comments

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  • Anglotino

    Uruguay needs to rein ingovernment spending a bit more. It has made amazing progress in reducing its deficit (and government debt) but lower government spending and a surplus will flow on to a lower inflation rate.

    Indeed Uruguay's reduction in government debt from 100% a decade ago to 38% now is even more impressive than Argentina's when you consider it has not destroyed the fundamentals of its economy to do it.

    Considering its lack of verifiable statistics, I'd be estimating that Uruguayos are already richer on a PPP basis than Argentinos. Which means that Argentina is in between two richer countries now.

    Feb 05th, 2013 - 07:48 am 0
  • ChrisR

    @1 Anglotino

    Good comments but a little askew regarding the present government.

    Pepe et al have SPENT on administration and all the other trappings of a government that all adds to fiscal drag. They have let UTE (the monopoly electricity provider) raise prices THREE times last year and the so called Economy Minister Lorenzo went in print praising UTE for balancing the books by ‘managing the price increases’. It’s a fucking monopoly, what can the users (me, redpoll & ynsere, etc) do about it?

    The Pluna fiasco is directly attributable to Pepe and the guy from AR who owns Burquebus operating a concert party in order to carve up the market. It went sour when the ex-employee of Burquebus cocked the money supply up.

    Don’t get me wrong, I was very impressed with the Pepe administration at the beginning; unfortunately he has lost his way and the mishandling of TMBOA has cost him a lot of goodwill with the electorate.

    The next President (apparently he has already had a meeting with Pepe) was responsible for setting the ground that provided the good results, let’s hope he can do it again.

    Feb 05th, 2013 - 10:47 am 0
  • ynsere

    ChrisR @ 2
    It's not only Pepe who's lost his way - it's the entire Frente Amplio, now that the easy money has come to an end. No young in positions of leadership, no competent technical people, no respect for the constitution. Increasing corruption. I hope the next president will be either Pedro Bordaberry or Lacalle Pou - not another fellow traveller of the Communists, especially not the one preceding Mujica.

    Feb 06th, 2013 - 03:10 am 0
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