Uganda’s annual inflation rate ticked up to 3.2 per cent in January, driven by accelerating service costs and higher energy prices, even as food price pressures eased from the previous month’s festive spike.
The modest increase, from 3.1 per cent in December, reflects a change in the factors influencing consumer price growth, according to data from the Uganda Bureau of Statistics released Friday. Whilst fresh food prices cooled after December’s seasonal surge, core inflation — which excludes volatile food and energy items — climbed to 3.3 per cent from 3.1 per cent.
The Bank of Uganda has held its central bank rate at 9.75 per cent since October 2024. The January reading, whilst marginally higher than December, suggests underlying price pressures remain contained, with the shift from food to service-driven inflation likely to keep policymakers in a wait-and-see mode.
Services inflation, a sub-component of core consumer prices, posted the sharpest rise, jumping to 4.8 per cent from 4.0 per cent in December. The increase was led by air transport costs, which surged 8.8 per cent year-on-year compared with just 1.2 per cent in December. Road passenger transport inflation swung to zero from a 3.8 per cent decline the previous month, reflecting a return to normal pricing and passenger volumes after the festive period.
Transport inflation rose to 1.8 per cent from just 0.1 per cent, whilst housing costs climbed 3.1 per cent, up from 2.5 per cent. Water supply charges jumped 10.3 per cent annually, accelerating from 8.3 per cent in December.
The insurance and financial services category posted annual inflation of 12.3 per cent, up from 10.1 per cent, driven by a 9.1 per cent month-on-month jump, the largest single-month gain across all major categories. Financial services inflation reached 13.4 per cent annually, compared with 11.1 per cent in December.
Food crops inflation eased to 3.0 per cent from 4.4 per cent, providing some respite following the surge in vegetable prices in December. Matooke prices fell 4.5 per cent on-year, reversing the 0.7 per cent gain recorded in December, while tomato prices dropped 10.1 per cent compared with a 4.3 per cent decline the previous month. Sweet potato inflation also moderated sharply to 4.0 per cent from 12.5 per cent.
The consumer price index rose by 0.3 per cent month-on-month in January, slowing from December’s increase of 0.5 per cent as the effects of the festive season unwound.
