Uruguay 12-month inflation in January soars to 9.10%, as energy rebate ceases

Feb 06, 2014 12:00 AM

Consumer prices in Uruguay during January soared 2.44%, according to the latest release from the stats office, INE, and the highest percentage since 2002.

This means accumulated inflation in the last twelve months reached 9,10%, compared to the 8.52% for the twelve months of 2013.

Analysts were expecting prices to increase 2.10%. In January a year ago inflation reached 1.9%.

The item Housing with a jump of 11% had the most incidence in the January percentage, particularly because public utility rates which had been frozen or artificially reduced in November and December to avoid a double figure inflation, were adjusted in the first month of the current year.

This explains why electricity bills went up 35%; drinking water 7.8%; cooking gas, 4.10%; condos monthly maintenance fees, 5.64%; home taxes, 1.54% and rent 1.06%.

All public utility rates in Uruguay are fixed by government, which means such is the case of electricity, as happened in 2012 and 2013, when annual inflation threatens to reach an annual double figure, in November and December some sort of scheme is implemented that helps keep the percentage down.

Obviously this is immediately reflected with significant rises in the first quarter of the following year.

Other items which had an impact but not so great were transport (because of the increase in fuel prices), 1.97%; food, 1.33% and education costs, 1,87%.

Imported oil dependent Uruguay has some of the world's highest costs for fuel with regular petrol at 1,95 dollars a liter and diesel, 1.80 dollars.

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