Inflation in Uruguay is 7.41%, remains outside government’s target range

RIO DE JANEIRO, BRAZIL – Inflation in Uruguay stood at 7.41% in September -a little below 7.59% in August-, which means that it remains outside the target range established by the Government led by the center-right Luis Lacalle Pou, which goes from 3 to 7%.

This is shown in the latest Consumer Price Index (CPI) report of the National Statistics Institute (INE) published this Tuesday (5), which indicates that there was a monthly variation of 0.46% and that the accumulated variation so far in 2021 is 6.69%.

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The INE also states that the major incidences in the monthly variation of the index come from the sectors of Food and Non-Alcoholic Beverages in 0.15%, Housing in 0.05%, and Restaurants and Hotels in 0.13%.

In addition, the report details some of the critical points in the increases such as meat -mainly whole chicken, which increased by 5.49%- and the rise in the price of housing rent by 0.50% or the increase in beverages outside the home by 1.24%.

Regarding the inflation figure of the September report, the Monetary Policy Committee of the Central Bank of Uruguay issued a statement on Tuesday in which it expressed that the figure remains “above the ceiling of the target range,” but that inflation continues “its convergence to the target”.

In this sense, the Committee “considers it necessary to consolidate the process of reducing inflation expectations” in a scenario that shows a nascent recovery and a “gradual exit from the most expansionary phase of monetary policy”.

“This gradual process is expected to continue in the remainder of 2021, always considering the reaction of inflation expectations and the development of the health and economic situation,” the document stresses.

Finally, the BCU board concluded that “as long as there are no health setbacks,” the monetary policy priority will focus on “driving inflation expectations” to a range of 3 to 6%.

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