Inflation rises to highest since February 2016

Inflation rose 6.8% year on year in April from 6.4% in March, according to figures from the Uganda Bureau of Statistics.

The rise is the highest since February 2016, when annual headline inflation was 7.0%.

The statistics bureau attributes the rise to an increase in annual food crops inflation to 21.6% compared to 20.9% in March. This was on the back of the prices of vegetables increasing by 14.0% year on year compared to 11.9% in March.

Core inflation, which strips out volatile food and energy prices and is therefore closely watched by Bank of Uganda, inched up 4.9% versus 4.7% in the previous month, driven by a 5.1% increase in the prices of other goods from 4.8% the previous month.

The prices of energy, fuels and utilities rose 5.3% year on year compared to 3.8% last month. This was due to an increase in annual inflation for liquid fuels by 4.1% compared to 2.5% in March.

“In particular, diesel inflation increased to 29.3% for the year ending April 2017 compared to 20.2% recorded in March 2017 and petrol inflation increased to 9.7% for the year ending April 2017 compared to 2.1% recorded in March 2017,” a release from Ubos said.

However, monthly inflation slowed down, rising 0.4% compared to 0.7% in March. The main contributor was a 2.9% increase in the prices of food crops and related items compared to 3.7% last month. Monthly core inflation also rose by a lower rate compared to March, coming in at 0.1% from 0.2. EFU inflation dropped by 0.2% compared to a 0.9% rise the previous month.