Uruguay: Inflation stable in May, government to extend price freezing agreements
June 5, 2014
In May, consumer prices rose 0.32% over the previous month, which contrasted the 0.06% fall recorded in April. The print fell slightly short of market expectations of a 0.36% increase. According to the Statistical Institute, all but one of the categories measured in the index registered an increase over the previous month. The largest increases were registered in clothes and footwear, restaurants and hotels and diverse goods and services.
Prices for foodstuffs and non-alcoholic beverages dropped after the government reached an agreement with the country’s main supermarket chains to freeze prices of several goods. On 5 June, the government announced that it would try to extend the agreement until July, when a reduction in the prices of electricity provided by the national electrical company UTE will be introduced.
Annual inflation was stable at April’s 9.2% in May. Inflation remains well above the Central Bank’s target range of 4.0%–6.0%. Moreover, average annual inflation inched up from 8.9% in April to 9.0% in May, marking the highest level since December 2004.