Uganda has recorded the lowest inflation rate in the past 15 months because of falling commodity prices, particularly those of food and petrol.
The annual headline inflation rate for the nation, which takes into account items in the Consumer Price Index (CPI), dropped to 3.9% over the past 12 months from 4.9% the year before, according to the Uganda Bureau of Statistics (Ubos), which noted this on Monday.
Uganda's annual inflation rate of 3.1% in February 2022, is the lowest inflation rate the nation has seen up until now. According to Ubos, over the same time period, annual core inflation, which excludes volatile goods like energy and gasoline from the CPI, slowed to 3.8% in July from the 4.8% recorded in the year that ended in June. Additionally, it hasn't been this low since April 2022, when it was 4.3 %.
Both the yearly headline inflation and the annual core inflation are now below the Bank of Uganda's (BoU) policy aim of keeping inflation in Uganda under 5%.
Food makes up 60% of the inflation calculation, while energy and gasoline make up 20%. As a result, as the prices of these commodities decrease, inflation levels also decrease.
The Director of Economic Statistics at Ubos, Ms. Aliziki Kaudha Lubega, stated that the main factors contributing to the decline in inflation were maize flour, cassava flour, rice, and live chicken prices, all of which had decreased. She was presenting the Consumer Price Index for the year ending July in Kampala yesterday.
She said that food crops and associated products inflation, which rose by 9.3% in the year ending July 2023 compared to 12.3% in the year ending June 2023, was the other factor in the slowing in annual inflation.
She also mentioned that the rate of services inflation dropped from 3.3% to 2.5% in the year ending July 2023.
“This is attributed to annual passenger transport services inflation that decelerated to negative 7.0 percent in the year ending July 2023 compared to negative 3.9 percent registered in June 2023,” she said.
According to Aliziki, the annual inflation rate for energy, fuel, and utilities decreased from negative 3.1% to negative 1.6% in the year ending July 2023.