Business
Ugandan inflation nudges higher in January
Publish Date: Feb 03, 2014
Ugandan inflation nudges higher in January
Prices of food and non-alcoholic beverages rose 1 percent from the previous month.
  • mail
  • img
newvision

NAIROBI - Kenya's year-on-year inflation rate inched up to 7.21 percent in the year to January, the statistics office said on Friday, coming closer to the 7.5 percent upper threshold of the central bank's target range.

In neighbouring Uganda, headline inflation also rose, to 6.9 percent in January from 6.7 percent the month before. Core inflation fell to 4.6 percent from 5.7 percent.

The two east African economies have enjoyed relatively manageable inflation in the past two years. High commodity prices in global markets and drought at home had caused inflation to soar in 2011.

Kenya's policymakers held interest rates at 8.5 percent for their fourth straight meeting this month, citing stability in key indicators such as inflation.

Though the January inflation increase is small, it is the first since September, when it jumped to its 2013 high of 8.29 percent after a new sales tax came into force. Traders said it is unlikely to affect policy for now because the outlook for prices is still benign.

"Headline inflation remains contained, with major threats expected to escalate from May onwards due to grain imports and potential negative base effects," said Alex Muiruri, a fixed-income trader at African Alliance Investment Bank.

Prices of food and non-alcoholic beverages rose 1 percent from the previous month. Housing, water, electricity and gas prices were up 0.87 percent. Education costs rose to 3.7 percent, reflecting a seasonal adjustment at the start of the new school year.

In Uganda, traders said policymakers were likely to leave rates unchanged in February after the decline in core inflation.

"It's also worth noting that commercial banks' lending rates are still high and BOU (the central bank) is eager to bring them down and a rate hike wouldn't serve that purpose," said Benson Okwenje, a trader at Stanbic Bank Uganda.

The central bank unexpectedly trimmed its benchmark lending rate by 50 basis points to 11.5 percent in early December, citing economic growth below potential.

Annual food inflation for the year ending in January rose to 11.1 percent from 9.2 percent in December, causing the slight rise in the headline rate.

Reuters

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Africa’s economy remains robust – UN report
Economic activity in sub-Saharan Africa remained robust in 2014, achieving a 0.2% growth, says a UN Economic Commission for Africa....
Nigerian billionaire to Ugandan youth:
Nigerian billionaire Tony Elumela was amazed by some 45 youthful Ugandan aspiring entrepreneurs in Kampala, including ambitious farmers...
China manufacturing index
Chinese manufacturing activity slowed further in July, official data showed Saturday....
Shell resumes offshore oil drilling in Arctic
Oil giant Shell has resumed offshore drilling operations in Alaskan waters, after one of its icebreakers was delayed....
Posta Uganda to launch financial services
Posta Uganda will launch financial services to use its country wide postal networks to promote financial inclusion especially the unbanked rural communities....
UAE Exchange customer wins MoneyGram’s grand getaway first weekly draw
Electronic gadgets were raining for the customers of UAE Exchange as the winners for the first draw of MoneyGram’s Grand Getaway promotional campaign was announced. Five winners were announced in the first weekly draw conducted on July 16, 2015....
Should faith based organisations be registered as Non-government organisations?
Yes
No
Can't Say
follow us
subscribe to our news letter