Inflation drops further in January

Uganda’s headline inflation rate dropped further in the first month of 2018, coming in at 3.0%, the Uganda Bureau of Statistics said on Wednesday. Compared to December’s 3.3%, this indicates a slower rise in the Consumer Prices Index compared to December’s 3.3%.

Ubos said the decline in the key rate was due to the falling rate of annual core inflation, which came in at 2.6% compared to the 3.0% registered in the year ended December.

A slowdown in the rise of prices of goods in the other goods category, particularly sugar and bread and cereals, contributed to the fall in core inflation. Sugar inflation was reported at -4% versus 5% in December, while bread and cereals inflation slowed by 4% to 2.1% in the year ended January.

Annual food crops inflation increased to 1.4% compared to -0.7% in the year ended December 2017. This was due to vegetables inflation that rose to 2.7% from -0.9%. Notable food crops items that had increased inflation were cabbages, potatoes, and carrots, Ubos said.

Energy, fuels and utilities inflation declined to 9.8% for the year ending January 2018 from the 12.5% recorded in the previous month. This was due to annual Inflation for solid fuels (charcoal & firewood) that decreased to 17.1% compared to 20.2% recorded for the year ended December 2017. Liquid energy fuels inflation declined slightly to 5.2% from 5.5%.

On a monthly basis, headline inflation for January dropped 0.3% from the 0.6% rise recorded in December 2017. The drop was driven by a decrease in core inflation by 0.5% versus a 1% rise recorded the previous month. Energy, fuel, and utilities inflation increased by 0.8%, while food crops inflation also rose 0.5% after dropping 2% in December.