Uganda’s Inflation Rate on a Positive Downward Trend

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In a promising turn of events for Uganda, the country has experienced a welcome decrease in inflation rates over the last 12 months, ending in October 2023. This decline can largely be attributed to the remarkable slowdown in the price increments of essential commodities, specifically round onions, maize flour, and sugar.

The recently released report by the Uganda Bureau of Statistics (UBOS) reveals that the average inflation rate for the period from October 2022 to October 2023 stood at a commendable 2.4 percent. This represents a significant drop from the 2.7 percent average recorded in the previous year ending in September 2023.

The report highlights the incredible progress made in curbing inflation for these key commodities: Round onions saw a substantial reduction in their price increase, slowing down to 115.4 percent from 130.8 percent in the previous month.

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Sugar exhibited a remarkable decrease, with its inflation rate slowing to 16.3 percent compared to 34.0 percent.
The most noteworthy change was observed in the maize flour sector, which shifted to a negative 23.0 percent from a negative 3.8 percent in the same period.

Notably, maize flour and sugar are categorized as “other goods,” while round onions are classified under “food crops and related items.” These two categories are instrumental in driving the deceleration of the Consumer Price Index, as reported by UBOS.

Edgar Niyimpa, a principal statistician at UBOS, stated, “From the core classification category, which slowed down to 2.0 percent for the year ending in October 2023 compared to 2.4 percent in the year ending September 2023, we recorded slowdowns from other commodities, for example, rice, which was registered at 0.2 percent compared to 5.2 percent last month, and mukene at negative 10.7 percent versus the negative 5.4 percent.”

However, it’s not just good news for food items. The services sector did experience a slight increase in inflation, rising to 2.2 percent from 1.6 percent in the year ending September 2023. This can be attributed mainly to the education services sector, with its inflation rate increasing to 6.1 percent compared to 3.8 percent in the previous month.

Another segment that showed an increase in inflation rates was the energy, fuel, and utilities sector, which rose to 2.2 percent from a negative 1.2 percent.

This change was primarily due to the increase in petrol prices, which registered a negative 11.1 percent compared to a negative 17.6 percent, electricity at negative 1.4 percent against negative 10.4 percent the previous month, water charges standing at an increased inflation rate of 13.0 percent versus 9.7 percent in September, and diesel posting negative 11.2 percent, which is an improvement from the negative 19.2 percent in September.

As the year-on-year average rate indicates a reduction of 0.3 percentage points, the report also shows that on a month-to-month basis, the increase was at 0.6 percent, lower than the 0.7 percent recorded in August to September.

In addition to the reduction in inflation, the report also recorded an increase in the average prices of selected products on a month-to-month basis. Petrol stood at 5,485 shillings, up from 5,384, and diesel at 5,153 shillings, higher than 4,970 shillings for September. Sugar was also positively impacted, posting 5,847 shillings against 5,586 shillings.

All in all, these trends bode well for Uganda’s economic stability and the well-being of its citizens, as the reduced inflation rates in essential commodities contribute to an improved standard of living and financial security for the population. Uganda’s economy is on a positive trajectory, and its people have reason to celebrate these encouraging developments.

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