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MONTEVIDEO, Jan 14 (Reuters) - Uruguay is increasing electricity prices by 6.9 percent, Industry Minister Roberto Kreimerman said on Wednesday, as part the government's efforts to cut its budget deficit.
National utility company UTE had proposed a rise of just 3.9 percent.
"Tariffs will rise by 6.9 percent and will include, on top of this hike, which is still below inflation, incentives to improve energy efficiency," Kreimerman told a news conference.
The small South American country has registered solid economic growth for a decade under its left-wing government, but the government is struggling to cut a budget deficit of 3.6 percent of gross domestic product, while also trying to tame inflation, which was 8.26 percent last year.
The rise in the cost of electricity will be offset somewhat by last week's 3.8 percent reduction in fuel prices due to the plunge in crude oil prices. (Reporting by Malena Castaldi; Writing by Sarah Marsh; Editing by Peter Galloway)