IMAG3394

Inflation subsides to 1.8% in April

By Edwin Muhumuza

Uganda’s inflation has dropped to 1.8% in the month of April  compared to  2% registered in the previous month of March.

The drop is attributed to reduction in prices of food crops especially fruits such as oranges. Others  include  maize flour, sugar, milk, and simsim.

According to the Uganda Bureau of Statistics,principal statistician,Vincent Musoke,a drop in  inflation does not mean prices have come down but rather the speed at which prices are rising is still slow. Musoke, clarifies that unless the drop is down into negatives then that is when you expect prices to come down.

‘’However it should be noted that this is a general measure .You find that some products, their prices come up while the others come down. When you put them together you get the correct figure of the annual inflation.’’

Uganda continues to grapple with increasing prices of some essential products amid proposed tax increases. Among them include, all types of fuel, cement, construction materials, spirits, social services and foods like Rice, Matooke, Onions, and Apples.

According to the Uganda Bureau of statistics,this trend will sharply determine the public’s consumption behaviour.

During the release of the consumer price index for the year ended April 2018,it was also noted that Arua registered the highest annual inflation of 3.9% though lower than 4.8% recorded for the year ended March 2018.The rise was mainly driven by annual inflation for housing, water, electricity, gas and other fuels .The second highest was Fort Portal,followed by Kampala High Income and then Mbale.

Economic Outlook

The growth outlook for 2018 is positive. Rebounding investment activity and healthy domestic demand fueled by accommodative monetary policy, are set to underpin GDP growth this year. In the medium term, economic activity should be buttressed by the sustained expansion of the agriculture sector and planned government investments in oil and gas production. Focus Economics panelists project growth of 5.7% in 2018, which is up 0.3 percentage points from last month’s forecast, and 5.9% in 2019.

 

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