Uruguay: Inflation reaches 15-month high in January
February 5, 2014
In January, consumer prices rose 2.44% over the previous month, which was the highest reading since September 2002. This figure contrasted the 0.72% drop recorded in December and exceeded market expectations of a 2.10% increase. The sharp increase was driven by the national electricity company's (UTE) cancellation of the 20.0% reduction in electricity tariffs that was announced and calculated in December. After factoring in the step back due to the tariff revision, prices for housing - which include prices for electricity - soared in January, thus driving up the consumer price index.
Annual inflation rose to 9.1% in January, which was up from the 8.5% tallied in December and marked the highest value since October 2012. Consequently, inflation remains well above the Central Bank's target range of 4.0%-6.0%.
LatinFocus Consensus Forecast participants expect inflation to moderate to 8.0% by the end of 2014, which is up 0.1 percentage points from last month's projection. For 2015, panelists see inflation at 7.3%.