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Thursday,September 24,2020 14:54 PM

Inflation Contained

By Vision Reporter

Added 1st January 2002 03:00 AM

THERE was a little increase in the general price level of goods and services in December due to a rise in the prices of bananas,

THERE was a little increase in the general price level of goods and services in December due to a rise in the prices of bananas,

By John Odyek THERE was a little increase in the general price level of goods and services in December due to a rise in the prices of bananas, inland postage, malwa (local brew), tobacco, drugs, charcoal, clothing, footwear, rent, fuel, utilities and oranges. Matthew Ssewanyana, the acting director of Uganda Bureau of Statistics (UBOS), told journalists yesterday at the Ministry of Finance boardroom, that the headline inflation rate for December increased to -4% compared to -5% in November. This was the fourth consecutive month of registering negative inflation. This was mainly due to lower food prices in the last quarter of the year compared to those of the same period last year. Inflation refers to a rise in the general price level of commodities. The headline inflation rate is calculated from the relative changes in prices for all goods and services consumed by households. The negative rate shows a negative growth trend. The underlying inflation rate for December rose to 3.8% compared to 2.1% for November. The underlying inflation rate is based on relative changes in prices for all commodities excluding food crops consumed by households. Ssewanyana said the annual inflation target set at 5% had been met and the figure was below 5%. He predicted that the low prices of foodstuffs was likely to increase with time. When Muslims in Uganda were breaking fast during the month of Ramadhan they ate a lot of sweet bananas, this pushed up the prices of bananas and contributed to a rise in inflation in December. “When they are breaking the fast, they tend to eat these fruits (bananas). This leads to a big demand. This is partly responsible for an increase in prices,” Ssewanyana said. During Christmas many people jammed the bus parks and similarly transport fares for long distances from Kampala, Jinja and Gulu rose. Vincent Nsubuga, Principal Statistician in Charge of Prices, said farmers cannot celebrate, as the prices of their products have been low. Nsubuga said when farmers have no income then they cannot purchase goods and services, leading to low sales by the business sector. When the business sector gets limited profits they reduce on the number of workers. The lack of income eventually leads to poverty. Ends

Inflation Contained

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