Uganda’s inflation numbers drop significantly
October 31—Uganda’s inflation numbers were down in October reflecting an improving supply situation due to good rains for the country’s agriculture sector, the mainstay of the economy.
The Annual Headline Inflation for October 2017 dropped to 4.8% as compared to 5.3% that was recorded in September 2017 while the Annual Core Inflation fell to 3.5% from 4.2%. A drop in the core inflation tends to signal more easing of the base lending rate as managed by the Bank of Uganda through the Central Bank Rate now at 9.5%.
“We saw a decline of prices for food items in most towns across the country, because of the good supply of food items on the market. The improved production in the agriculture sector was due to good rainfall,” Dr.Chris Mukiza, the Director of Macroeconomic Statistics at the Uganda Bureau of Statistics (UBOS) said early this week.
He said the country experienced a good supply of food products on the market which reduced the pressure on prices and leading to the decline of annual inflation.
However according to the latest report, the Annual Energy, Fuels and Utilities (EFU) Inflation increased to 14.1% in year ending October 2017 as compared to 10.6% recorded in September 2017. This was due to the Annual Inflation for Solid Fuels (Charcoal and Firewood) that increased to 25.0% in October 2017 as compared to 15% recorded end of year September 2017.
He said due to the good supplies from farmers during October, annual inflation for food items declined to 7.8% in October 2017 as compared to 9.6% recorded in September. Fruits inflation dropped to 9.7% in the year ending October 2017 as compared to 10.9% recorded in the year ended September 2017
Food items whose prices went down in across the country included bananas in Western and Central region; maize flour, vegetables and fruits.
For services, the rate dropped to 2.3% in October 2017 as compared to 4.1% seen the previous month. Other Goods inflation increased to 4.3% in the year ending October 2017 compared to 4.2% recorded the year ending September 2017.
Analyzing inflation performance by urban centres or towns, the UBOS report reveals that Fort Portal in western Uganda, registered the highest annual inflation of 8.1% in October 2017, but lower than 8.9% recorded in September. Gulu in northern Uganda comes next at 7.0% compared to 8.8% recorded in September. Third highest inflation was realized in Arua to the northwest standing at 6.7% in October as compared to 9.0% recorded previously.