Stronger vegetable prices helped push Uganda’s consumer price inflation in March to its highest level in five months — and fourth consecutive increase — while core consumer prices moderated as transport inflation slowed.
The consumer prices index, which measures the general level of prices for goods and services, rose by 4.1 per cent in the year to March, up from 3.8 per cent in February, according to the Bureau of Statistics.
The rise in the overall inflation rate was driven by an increase in the prices of vegetables cultivated for their fruit which rose 2.5 per cent year on year, down from the 12.6 per cent decline reported in February. Fruit inflation fell at a slower pace in the month, 0.8 per cent compared to 3.3 per cent in February.
The core gauge of inflation slowed to its lowest level in nine months, rising 5.3 per cent in the year to March, down from 5.6 per cent in the previous month. This followed a slowdown in transport services inflation to 53.9 per cent versus 56.3 per cent in February, which was responsible for the moderation in yearly service prices.
Core inflation excludes food and energy prices as they are considered volatile — and hence transient indicators of underlying price pressures — and is the main target variable of the central bank’s efforts to influence economic activity and keep prices stable.
The Bank’s monetary policy committee is scheduled to meet in April for its latest monetary policy round. Its last meeting in February saw it keep interest rates unchanged at historic lows, with a return to stronger growth its main concern.
In February, BoU’s policymakers said inflation in the next few months will decline as consumer costs of public transport fall and domestic productivity picks up. The projections have been born out by recent data which gives the Bank little reason to divert course.
On a monthly basis, overall inflation was unchanged at 0.3 per cent with food prices driving growth. Inflation for food crops and related items grew 1.5 per cent, down from 2.2 per cent in February. Core inflation moderated to 0.1 per cent from 0.2 per cent the previous month.
