Consumer prices drop further in February

Inflation in Uganda slowed further in February to a 38-month low, driven by a decline in core inflation, the Uganda Bureau of Statistics said on Wednesday.

Consumer prices rose 2.1% on a year-on-year basis in February, down from the 3.0% registered in January. The reading is the lowest since December 2014 when annual headline inflation was also 2.1%.

Ubos said the decline in the headline rate was due to a fall in core inflation, which eliminates volatile food and energy prices. It came in at 1.7% versus 2.6% in January due to a decline in other goods inflation and services inflation.

Annual sugar prices dropped -11.5% compared to -4.0% the previous month, while bread and cereals prices fell -1.1% compared to a 2.1% rise in January; this saw other goods inflation fall to 1.6% from 2.3% the previous month. Services inflation fell to 1.8% year on year from 3.0% in February.

Food crops and related items inflation fell to -0.7% from 1.4% for the year ended January, driven by a decline in vegetables and fruits inflation.

On the other hand, energy, fuels and utilities inflation inflation increased to 11.2% for the year ending February 2018 compared to the 9.8% recorded in Januaury. The increase was due to an increase in inflation for liquid energy fuels to 7.3% compared to the 5.2% recorded in January.

On a monthly basis, headline inflation in February came in at 0.0%; in January it was recorded at -0.3%. Core inflation was 0.3%, down from 0.5% the previous month, while food crops prices rose 1.3% versus the 0.5% rise in January.