Brazil & Southern Cone - February 2012 (ISSN 1741-4431)

Inflation, one of President José Mujica’s main bugbears, is showing signs of slowing down. The consumer price index (CPI) increased 0.74% in January as 12-month inflation reached 8.05%, according to the national statistics institute (Ine). Inflation reached 8.6% in 2011. January’s CPI was driven by clothing and shoes (1.27%) and transport (1.01%).

President Mujica gave a characteristically candid interview with the weekly magazine Búsqueda this month, during which he claimed that “From a real point of view it (Mercosur) might exist, but from a juridical point of view, it is meaningless.” Mujica added: “If nobody respects the commitments, we don’t have to respect them either. It’s ridiculous to make a complaint if nobody pays any attention.” He added that if Uruguay chose to renege on aspects of the agreement in future, such as bilateral trade deals with third countries, it would simply ignore complaints from other members. Days earlier, Argentina (the main target of his criticism) introduced a new licensing system to restrict imports, another part of its rehabilitation of Raúl Prebisch and import substitution industrialisation.