Uruguay: Inflation continues to moderate, peso strengthens slightly in October
November 6, 2014
In October, consumer prices rose 0.59% over the previous month, marking a four-month low. October’s print came in below September’s increase (+1.00% month-on-month) and undershot market expectations of a 0.79% rise. According to the Statistical Institute, October’s reading mainly reflected higher prices for food and non-alcoholic beverages, as well as for clothing and for restaurants and hotels.
Annual inflation fell from September’s 8.4% to 8.1% in October, continuing the downward trend that began in February and reaching the lowest level since May 2013. Annual average inflation remained unchanged at September’s 9.0%. Inflation is well above the Central Bank’s target range of between 3.0% and 7.0%. However it is still below the 10.0% ceiling above which labor contracts are entitled to a new round of wage negotiations.
Following a gradual depreciation in September, the Uruguayan peso gained some ground in October, when it traded at 24.0 UYU per USD.
Author: Cecilia Simkievich, Economist