March 30 (Bloomberg) -- Uruguay's annual inflation rate surged to a two-year high in March on rising prices for food, beverages and transportation.

Consumer prices rose 7.36 percent from a year earlier, the biggest jump since December 2004, according to Bloomberg data. Monthly inflation rose to 0.9 percent from 0.61 percent in February, the National Statistics Institute reported today on its Web site.

``The accumulated inflation rate makes me doubt the government can attain its annual inflation target,'' said Milton Ferla, a private economic consultant in Montevideo. ``In the first quarter, the consumer price index is already about half way to the ceiling set by the government for the whole year.''

Prices of food and beverages rose in the South American country 1.47 percent while transport costs rose due to a 3.15 percent surge in gasoline prices, the institute said. Consumer prices have risen 3.31 percent in the first quarter of the year.

The central bank targets an inflation rate ranging between 4.5 percent and 6.5 percent for 2007 following a 6.38 percent increase in 2006.

``We still have to wait for salary adjustments in all labor sectors to become effective in July as well as further rises in international oil prices,'' Ferla said.

Uruguay's peso was unchanged today at 24.12 pesos per U.S. dollar and has strengthened 1.2 percent so far this year.

To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.netJorge Rebella in Montevideo at jrebella@adinet.com.uy

Last Updated: March 30, 2007 14:37 EDT