Uganda’s annual inflation rate eased to 2.9 per cent in February from 3.2 per cent in January, as core consumer prices moderated on slower growth in service costs, particularly education fees.
The decline marks the lowest inflation reading since late 2024, according to data from the Uganda Bureau of Statistics released this week. Core inflation — which strips out volatile food and energy items — edged down to 3.0 per cent from 3.3 per cent in January.
The sharpest deceleration came from education services, where annual inflation dropped to 4.1 per cent from 7.6 per cent in January. The swing reflects the high base effect from substantial fee increases that took effect in early 2025, which are no longer feeding through to year-on-year comparisons at the same rate.
More broadly, services inflation, which accounts for 38.4 per cent of the consumer basket, slowed to 4.1 per cent from 4.8 per cent, with air transport costs moderating sharply to 0.5 per cent from 8.8 per cent year-on-year in January.
Core goods inflation held steady at 2.1 per cent, though the composition shifted. Dried fish prices surged 8.5 per cent year-on-year, up from 2.8 per cent in January, whilst maize flour inflation jumped to 10.8 per cent from 5.0 per cent. Bread prices, which had been declining, turned positive at 1.3 per cent compared with minus 1.8 per cent the previous month.
Food crops inflation also eased, dropping to 1.8 per cent from 3.0 per cent in January. Tomato prices fell 17.6 per cent year-on-year, accelerating from a 10.1 per cent decline in January, as seasonal harvests increased supply. Dry beans slipped into deflation at minus 1.1 per cent, whilst fresh leafy vegetables registered a marginal 0.2 per cent decline.
Energy and utilities inflation moved in the opposite direction, rising to 2.7 per cent from 1.7 per cent. The increase was driven by firewood prices, which climbed 10.3 per cent annually compared with 6.9 per cent in January, and charcoal, which rose 6.0 per cent against 4.6 per cent previously. Petrol inflation also accelerated to 3.4 per cent from 1.3 per cent.
Regional variations were pronounced. Masaka registered the highest inflation at 3.8 per cent, driven by a 2.4 per cent rise in food costs. Kampala’s high-income areas posted 3.5 per cent inflation, down from 4.0 per cent in January, as housing and utility costs climbed 3.8 per cent. Arua recorded the lowest rate at 1.1 per cent.
Month-on-month, the consumer price index rose 0.3 per cent in February, matching January’s pace. Core inflation rose 0.3 per cent, down from 0.5 per cent in January, with core goods at 0.4 per cent and services at 0.2 per cent.
Fresh produce prices posted gains, with tomatoes rising 3.0 per cent, green cabbage jumping 6.2 per cent, and Irish potatoes gaining 2.4 per cent. Energy costs also climbed, with petrol up 1.4 per cent and firewood rising 2.1 per cent.
The Bank of Uganda has held its central bank rate at 9.75 per cent since October 2024.
