Uganda inflation holding to single digits despite electioneering
KAMPALA, FEBRUARY 1 -Uganda’s annual headline inflation was holding within single digit territory at the end of January, reflecting declining food and energy prices and the results of monetary policy actions by the Bank of Uganda over the past two months.
Annual headline inflation shrunk from 8.4 percent in December 2015 to 7.6 per cent in January 2016, the Uganda Bureau of Statistics (UBOS), helped by a 12.3 percent reduction in annual food crops inflation at the end of January 2016, compared to 16.0 percent at the end of December 2015.
“There has been adequacy in the market in terms of food supply because December and January are bumper harvest months and there has also been stability in the foreign exchange market, which in a way implied that the pressure on inflation is receding,” said UBOS Director for Macroeconomic Statistics, Dr. Chris N. Mukiza.
Mukiza further says that the Annual Energy, Fuel and Utilities (EFU) inflation, which has been one of the main drivers of headline inflation in past months’ fell from 7.1 percent in December to 6.8 percent in January. Annual core inflation went down from 7.6 percent to 7.1 percent at the end January.
Saying this “could be a one off”, Mukiza said there was no guarantee the trend would continue.
The news will come as a relief to consumers who have memories of a sharp rise in inflation during the 2011 presidential elections inflation peaked at 30.5 percent, sending borrowing rates shooting through the roof.