It is the first time in seven months that there has been an increase in the annual rate. The Food and Beverages sub-index accumulates a rise of 13.1% in the last year.
He Consumer Price Index (CPI) went up 0.75% in April and raised the annual inflation at 7.6%. It is the first time in seven months that there is an increase in the annual rate of inflation.
It had been falling significantly, due to the simultaneous combination of a more restrictive monetary policy on the part of the Central Bank of Uruguay (BCU) (which made the dollar drop significantly) and at the same time a drop in the international prices of various products, especially oil, which allowed a drop in the price of fuels.
However, in recent months a rise in the price of certain food, in particular of fruits and vegetableslargely because of drought effect. It should also be noted that several of these products, of farm origin, are protected in the local market, so imports are not free and are subject to sanitary authorizations. This makes it difficult for there to be a quick response from imports to rising prices.
image.png
Fruit and vegetables were added in the last month new increases in prices meat pricesin addition to increases in dairy and other foods. In such a way that the Food and Beverage sub-index of the CPI accumulates a rise from 13.1% in the last year, 5.5 points above the general price index.
Headline inflation fell to 6.9% in April
The new inflation data stands at more than one and a half percentage points above Target Range of the Central Bank, which goes from 3 to 6% per year. It is also almost one point above the goal that the economic team has for this year, which is to bring inflation to 6.7% in the year to December.
However, the trend inflation (which measures the evolution of prices leaving aside the most volatile ones, including fruits and vegetables) had a new decline according to the calculations of the Consultant CPA Ferrere. Your financial advisory manager, Nicholas Cichevskipointed out that trend inflation dropped in April to 6.9% and is in a minimum since May 2018.
It is expected that the high values of fruits and vegetables will begin to subside in the coming months, as the drought is overcome and new production begins to enter. Meanwhile, the increase in food particularly hits low-income families who have to apply most of their income to cover the basic basket.
Source: Ambito
