food crop

Uganda’s inflation hits 4.7%

By Edwin Muhumuza

Uganda’s annual headline inflation has been recorded at 4.7percent for the year ended July 2020 from 4.1 percent registered in June 2020.

This on account of an increase in annual core inflation that was recorded at 5.8percent in July compared to 4.9 percent in June which was mainly driven by services inflation specifically transport services inflation that increased to 47.3 percent in July from 34.2 percent in June.

According to the Uganda Bureau of Statistics (UBOS) Principal Statistician, Sam Kaisiromwe, the lifting of the lock down to allow cars and vehicles to resume domestic and long haul distance travel is testament to these results.

Relatedly, there was a reduction in consumer prices of food crops which registered a minus 5.8 percent in July compared to minus 5.0 percent in June.

Food crop prices have decreased for the second month running.

The decline is attributed to annual vegetable inflation that declined however fruits inflation increased, in other wards fruits prices are still going down but the rate at which they are going down have reduced in this month compared to last month, he added.

This trend was mainly driven by reduction in prices of vegetables such as green pepper, eggplants, tomatoes, round onions and green cabbage. Others were fresh beans, banana-standard, Irish potatoes, beans, sugarcane, tomato ketchup and whole cassava.

However, those that increased include, bus fares, taxi fares for medium distance while food items like water melon, ice cream, and whole grain maize increased in price.

In the Energy Fuel and Utilities sector, inflation declined to 6.6 percent for the year ended July 2020 compared to 8.3percent for the year ended June 2020.The decrease is mainly due prices of solid fuels mainly charcoal which has declined to 21.0percent from 26.4 percent. Additionally prices of firewood declined.

It is however noteworthy that annual prices of liquid fuels specifically petrol increased from a minus 7.4percent to minus 6.4 percent while monthly liquid energy fuels increased by 0.4 percent in July compared to 0.5 percent rise in June.

In the health sector, a combination of medical products, appliances and equipment, out- patient services and hospital services registered a decrease to 3.1 percent from 3.2 percent, but hospital services specifically registered a 4.1 percent rise from 3.7 percent.

Analysis by geographical areas and income groups revealed that Jinja city registered the highest inflation of 5.6 percent followed by Kampala High Income and Masaka centers at 5.2 percent. The main driver was transport, food and non-alcoholic beverages which saw an increase in prices.

The least annual inflation was registered in Mbale at 2.8 percent which was due to decrease in prices of food and non-alcoholic beverages coupled with a reduction in prices of clothing and footwear