Food items in a Ugandan market

Uganda’s year-on-year inflation edged down to 1.8 per cent in April from 2.0 per cent the previous month as some food prices declined, the Uganda Bureau of Statistics (Ubos) says in its latest report.

According to the report, the country’s consumer price index was last below this level in October 2014 when it was 1.5 per cent, and analysts say further slowing in prices could spur monetary agencies to extend an ongoing policy easing cycle.

Core inflation, which excludes metered water, electricity, food and fuel prices, dropped to 1.6 per cent from the 1.7 per cent recorded in March. Policymakers use the core inflation rate when setting policy.

Further, the report indicates that Month-on-month inflation rose to 0.8 from 0.5 per cent registered in March. It was zero percent in February. The increase was due to the increase in price levels of food crops that registered a 2.4 per cent rise in April 2018, up from the 2.7 per cent increase recorded in March 2018.

The Energy Fuel and Utilities Inflation decreased by 0.2 per cent in April 2018 from the 0.1 per cent rise recorded in March 2018.

In addition, Services Inflation decreased to 2.4 per cent for the year ending April 2018 compared to the 2.5 per cent recorded during the year ended March 2018.

Bread and Cereals inflation also declined to minus 5.3 per cent in April 2018 compared to 0.4 per cent in March 2018.

The Annual Energy, Fuels and Utilities (EFU) inflation rose to 10.4 percent for the year ending April 2018 compared to 10.3 per cent recorded for the year ended March 2018. The increase was due to increase in price of Diesel which rose to 15.0 per cent for the year ending April 2018 compared to 10.4 per cent recorded for the year ended March 2018.

Kerosene annual inflation rose to 12.0 per cent for the year ending April 2018 compared to 11.0 per cent recorded for the year ended March 2018.

The consumer price indices covered the ten baskets of Kampala High Income, Kampala Middle Income, Kampala Low Income, Jinja, Mbale, Masaka, Mbarara, Fort portal, Gulu and Arua. All the baskets are for the urban households.

Arua registered the highest annual inflation of 3.9 per cent for the year ending April 2018, though lower than 4.8 per cent recorded for the year ended March 2018. This rise was driven by price increases for housing, water, electricity, gas and other fuels.

The second highest inflation was registered in Fort Portal at 3.5 per cent for the year ending April 2018 compared to 3.2 per cent recorded for the year ended March 2018. The main driver for the increase was price increases for food and non-alcoholic beverages. Furnishings, household equipment and routine household maintenance also contributed as their inflation rose to 4.7 per cent for the year ending April 2018 compared to 4.5 per cent registered for the year ended March 2018.