Inflation at 3.6% as Uganda heads into elections

By Edwin Muhumuza

Uganda’s inflation has been recorded at 3.6 percent at the end of 2020 compared to the 3.7 percent registered for the year ended November 2020.

The decline is mainly attributed to Energy, Fuel and Utilities Inflation that decreased to minus 4.6 percent in December 2020 compared to minus 1.4 percent registered in November, according to the Uganda Bureau of Statistics during the release of the consumer price Index for December.

Specifically, Charcoal Inflation declined to minus 8.0 percent compared to minus 1 percent. In addition, Firewood Inflation declined to minus 14.6 percent compared to 3.3 percent in November.

According to Director of Macro Economic Statistics, Aliziki Lubega , the Annual Core Inflation increased to 5.9 percent in December compared to the 5.8 percent in November.

Specifically, Purchase of Second Hand Vehicles Inflation registered a 10 percent increase compared to 8.6 percent in November 2020 while Services Inflation registered 11.2 percent in December 2020 compared to 11.1 percent the previous month.

Geographically, the west Nile City of Arua registered the highest Annual Inflation of 7.3 percent in December 2020 lower than the 7.9 percent in November 2020.

This was driven by increased prices and costs to do with Restaurants and Hotels in the area. In addition, Housing, Water, Electricity, Gas and Other Fuels Inflation increased to 0.8 percent in December 2020 compared to minus 1.9 percent registered for November 2020.

The second highest Inflation was registered in the basket of Kampala High Income that registered an Inflation of 4.4 percent with the main driver of the prices being Food and Non-Alcoholic Beverages Inflation. Transport Inflation rose to 26.4 percent compared to 25.1 percent registered for November 2020.

The least Annual Inflation was registered in Mbale at 1.1 percent where the low inflation in the Centre was due to reduction and lower prices of Food and Non-Alcoholic Beverages as well as a decline in Housing, Water, Electricity, Gas and Other Fuels Inflation.

Relatedly, Prices of residential properties in Greater Kampala Metropolitan Area have registered a 9.7% increase compared to 1.2% in 2019 according to principal statistician Sam Kaisiromwe.

This is attributed the rising trend to prices of properties in Nakawa and Wakiso areas that increased from a negative 3.8 and negative 3.4 percent respectively in 2019 to 12.6 percent and 13.8 percent in 2020.

In addition, prices in Kampala and Makindye areas increased to 12.0 percent for the year 2020 from 7.2 registered in 2019. However prices in Kawempe and Rubaga areas declined from 5.0 percent in 2019 to a minus 1.5 percent in 2020.