Inflation rose for the first time in ten months in November, driven by an increase in services prices, although the closely watched core consumer prices indicator was unchanged.
The consumer prices index — a measure of the cost of goods and services — rose 2.6 per cent year-on-year, up from 2.4 per cent in October, according to data released by the Uganda Bureau of Statistics on Thursday.
This is the first rise in annual headline inflation since February.
Core inflation, the Bank of Uganda‘s preferred measure because it strips out volatile fuel and food prices, rose 2 per cent on year, the same rate as in October, ending a nine-month downward trend. At its last monetary policy committee meeting in October, when it kept the benchmark interest rate at 9.5 per cent, the bank said its medium-term inflation forecast was skewed to the upside and was the main factor in its decision to keep the policy rate unchanged.
Policymakers at BoU will meet next Wednesday to set the benchmark interest rate. The rise in headline inflation and the pause in the downward trend in underlying prices rule out a rate cut, but with both rates still well within the bank’s 5 per cent target, the BoU is likely to adopt a wait-and-see approach.
Services inflation — a component of core consumer prices — rose by 2.8 per cent year-on-year, up from 2.2 per cent in the prior month, driving consumer prices inflation. Ubos said child delivery services, international flights, and passenger transport by taxi and hired car drove the increase in services prices. The other core prices component, other goods inflation, dipped to 1.4 per cent from 1.8 per cent.
Prices for energy, fuels, and utilities rose by 4.3 per cent year-on-year, up from 2.2 per cent in October, driven by increases in the prices of petrol, diesel, kerosene, and charcoal.
Inflation for food crops and related items came in at 6.4 per cent, down from 6.6 per cent a month ago.
On month, consumer prices rose 0.2 per cent, down from 0.6 per cent in the previous month. Core inflation was unchanged at 0.3 per cent.
Services inflation rose 0.6 per cent, compared with 0.1 per cent in the previous month. In addition, charcoal prices increased by 3.2 per cent, compared with a fall of 2.9 per cent in the previous month. Petrol inflation was 1.9 per cent, slightly up from 1.8 per cent in October.
Prices of food crops and related items fell 0.3 per cent, down from 2.4 per cent in October, due to declines in the prices of onions, dry beans, and irish potatoes, among other items.
