Uganda’s annual inflation rises to 14%
Oct 01, 2009
Uganda’s headline inflation rate rose to 14.5% in September from 12.6% in August, mostly due to rising food prices because of drought, the Uganda Bureau of Statistics said on Wednesday.
KAMPALA
Uganda’s headline inflation rate rose to 14.5% in September from 12.6% in August, mostly due to rising food prices because of drought, the Uganda Bureau of Statistics said on Wednesday.
Core inflation, which excludes food, energy and metered water prices, dropped to 9.7% in September from 9.9% the previous month, the bureau said in a report.
“The main inflation drivers were food, household and personal goods, and health and entertainment,†it said.
“The increase in food prices is mainly attributed to low supplies to the market due to the drought conditions that affected many parts of the country in recent months.â€
Like its east African neighbours, Uganda has suffered a duel impact from high commodity and fuel costs and the global crisis.
Inflation rates in the region have fallen in recent months, but food prices remain stubbornly high.
Analysts in Kampala said they had anticipated a rise in inflation because of sky-high demand for food in east Africa, but some were surprised by the degree of the increase.
Traders said Uganda’s inflation rate would make it unattractive for foreign investors, who may look to alternatives like Zambia.
They said they did not expect the central Bank of Uganda to increase interest rates in response.
“There is no way you can expect people to invest in treasury bills when inflation is that high,†one trader told Reuters.
Uganda’s annual inflation has averaged around 5% over the past two decades, the Government says.
The rate has edged up since early last year, breaking into double digits in May 2008.
Central bank Governor, Tumusiime Mutebile said last month that inflation would not fall back into single digits as fast as expected due to high food demand across the region.
Reuters
Uganda’s headline inflation rate rose to 14.5% in September from 12.6% in August, mostly due to rising food prices because of drought, the Uganda Bureau of Statistics said on Wednesday.
Core inflation, which excludes food, energy and metered water prices, dropped to 9.7% in September from 9.9% the previous month, the bureau said in a report.
“The main inflation drivers were food, household and personal goods, and health and entertainment,†it said.
“The increase in food prices is mainly attributed to low supplies to the market due to the drought conditions that affected many parts of the country in recent months.â€
Like its east African neighbours, Uganda has suffered a duel impact from high commodity and fuel costs and the global crisis.
Inflation rates in the region have fallen in recent months, but food prices remain stubbornly high.
Analysts in Kampala said they had anticipated a rise in inflation because of sky-high demand for food in east Africa, but some were surprised by the degree of the increase.
Traders said Uganda’s inflation rate would make it unattractive for foreign investors, who may look to alternatives like Zambia.
They said they did not expect the central Bank of Uganda to increase interest rates in response.
“There is no way you can expect people to invest in treasury bills when inflation is that high,†one trader told Reuters.
Uganda’s annual inflation has averaged around 5% over the past two decades, the Government says.
The rate has edged up since early last year, breaking into double digits in May 2008.
Central bank Governor, Tumusiime Mutebile said last month that inflation would not fall back into single digits as fast as expected due to high food demand across the region.
Reuters