Uruguay’s inflation above target but exports hit new records

Year-on-year inflation in Uruguay in the month of May of 2022 has been reported to still be nearly 35% above the target range set by the government of President Luis Lacalle Pou, while exports amounted to US$ 1.5 billion, which set a record high.

According to the National Statistics Institute (INE) released Friday the Consumer Price Index (CPI) for May was 0.46% for an interannual 9.37% which exceeds previous projections.

In the first five months of the year, the INE reported inflation had reached 5.43%, which makes the target range of between 3 and 7% almost unattainable.

The main items accounting for this increase were Clothing and footwear (0.07%), Housing (0.12%), Transport (0.12%), and Restaurants and hotels (0.09%).

The good news, according to the Uruguay XXI Institute, was that in the year-on-year comparison, Uruguayan exports grew 57.4%, driven by soybeans and beef. China continues to be the main destination for Uruguayan goods. Sales abroad -including operations at free trade zones- amounted to US$ 1,541 million.

Between January and May 2022, exports totaled US$ 5,516 million for a 40% increase compared to the same period of the previous year. The 57% increase was explained by larger sales of soybeans, beef, cellulose, rice, vehicles, dairy products, and malt, although wheat and timber showed negative figures.

The increase in May was boosted by soybeans (+23%), beef (10.3%), cellulose (4.7%), vehicles (4.1%), rice (3.4%), and dairy products (2.7%) and malt (2.1%).

Uruguayan export went mainly to China (24%), Brazil (12%), the European Union (9%), Argentina (8%), and the United States (6%). In the January-May comparison, exports to China amounted to US$ 1,205 million, a 38% YoY. In the case of Brazil it was US$ 749 million (+38%), Argentina US$ 340 million (+129%), and the United States US$ 289 million (+25%).

Source: Merco Press

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