Inflation inches up in June

The annual inflation rate inched up in June due to an increase in energy, fuel, and utilities prices and the prices of food crops and related items, the Uganda Bureau of Statistics said on Friday.

The headline inflation rate, which measures prices of goods and services bought by households, increased by 2.2% from a year earlier, up from the 1.7% recorded in May, the highest rate since this January.

Rising energy and fuel prices were responsible for the largest upward contribution to the overall rate between May and June, according to Ubos figures. The 12-month energy, fuel and utilities inflation increased to 15.1% in June compared to 10.3% in May 2018.

There was also an upward effect from the prices of food crops and related items, which rose 2.3% from a year earlier, compared to the 0.2% decline recorded for May.

But core inflation, which excludes food and energy items that tend to fluctuate dramatically and is, as a result, closely watched by the Bank of Uganda, declined to 0.9% year-on-year from the 1.1% recorded in May. The last time annual core inflation recorded an increase was in September 2017.

On a monthly basis, the headline inflation rate for June fell 0.2% from an increase of 0.5% in May. Ubos said the decrease was due to food crops and related items inflation of -5.1% compared to 1.6% in May. Core inflation also rose but at a lower rate than in May; it came in at 0.1% versus 0.2% the previous month.