Rising prices for household goods and services, clothing and footwear, and fuel saw inflation rise further in March to a 3.7 per cent annual rate — the highest since July 2018, the furthest the current gauge can measure — highlighting the impact of the ongoing war in Ukraine on global supply chains.
The Uganda Bureau of Statistics said the rise in the consumer price index, which measures changes in the prices of goods and services bought by households, was mainly driven by increases in the prices of laundry soap, clothing material, foot wear, petrol, and diesel. In February, the 12-month inflation rate was 3.2 per cent.
Once volatile items like food and energy are excluded, the core consumer price index rose 3.6 per cent from a year ago, up from 3.1 per cent in February, the fastest increase since December 2020. The biggest contributors to the increase in core inflation were the prices of laundry soap, refined oil, and education costs.
The price increases recorded last month are, in part, a result of cost pressures caused by Russia’s invasion of Ukraine in February. The conflict has disrupted the global supply of sunflower oil — Ukraine is responsible for 47 per cent of global exports of the commodity — and pushed up the prices of other edible oils.
Fears of the effects of measures taken by western countries against Russia led to sharp rises in oil and gas prices to record highs, feeding through to fuel pump prices and the cost of commodities made with petroleum products, such as soap and detergents. The average price of a one-kilogram bar of laundry soap rose to Shs6,988 compared to Shs3,777 a year ago, while a litre of fuel cost Shs5,087 up from Shs3,791 in March 2021.
Energy, fuel, and utilities prices rose 8.5 per cent year on year, the sharpest acceleration since January 2019. Ubos said this was mainly due to an increase in charcoal prices, as well as the prices of petrol and diesel.
Consumer prices moderated on a monthly basis, rising 0.8 per cent in March compared to February’s 1 per cent increase. Core inflation was 0.6 per cent on the month, down from 1.1 per cent in January, while energy, fuel, and utilities inflation slowed to 0.7 per cent from 1.4 per cent in February.
Food crops and related items were the sole exception, increasing 3.7 per cent, the fastest monthly rate in 30 months, up from a decline of 0.2 per cent in February. This was mostly on a rise in the prices of cooking bananas, round onions, fresh milk, and sweet potatoes.
