Uruguay: Inflation picks up pace in May
Consumer prices rose 0.8% from the previous month in May, well above April’s 0.1% increase and marking the strongest rise since February. The print came in above the Central Bank’s expectations of a more moderate 0.5% increase. According to data released by the Statistical Institute, the result was primarily driven by higher prices for food, transport, recreation and culture,
Headline inflation reversed its downward trend in May, coming in at a 16-month high of 7.2%, up from the previous month’s 6.5%. As a result, inflation jumped above the upper bound of the Central Bank’s target range of 3.0%–7.0% in May for the second time this year. Whereas higher-than-projected inflation increases the possibility of a monetary policy reaction from the Bank in the coming weeks, the lowering of the monetary aggregate growth target seems unlikely, as small deviations from the target range appear to be tolerable. Lastly, annual average inflation edged up marginally to 6.2% in May, from 6.1% in April.