Inflation to stabiliseâ€" experts
Jun 07, 2004
INFLATION is set to stay at current levels despite a recent upsurge which halted its nine-month consecutive decline, analysts have said.
By Steven Odeu
INFLATION is set to stay at current levels despite a recent upsurge which halted its nine-month consecutive decline, analysts have said.
Inflation is the measure of rising prices across the board. Annual headline inflation has been declining since last June bottoming out in April when inflation was 0.4% before rising to 1.4% in May.
Uganda Bureau of Statistics officials attributed the rise in inflation to increases in food, oil and charcoal prices in the past two months.
“The rise in April food prices after nine consecutive months of decline should not be of great concern as favourable weather conditions point towards largely subdued food inflation during the remainder of the year,†Stanbic Investment Management Services (SIMS) said in a recent report.
“There is still a likelihood that the overall inflation rate will fall below 0.1%, but this largely depends on April’s jump in food prices being reversed over the coming months,†Martin Owiny, managing director SIMS said.
Owiny said although inflation will rise towards the end of the year, the rate will remain largely subdued, ending the year at around 4%, which is below the 5% target set by the Government last year.
There has been a slight increase in domestic fuel prices since the beginning of this year due to rising prices of crude oil in the world market.
However the strong shilling exchange rate partly offset the impact of high global oil prices.
The threat of inflation from this front has increased over the past few weeks. But economists expect seasonal factors to push global oil prices lower during the second and third quarters of the year.
“This, with the steady shilling exchange rate, will ensure that imported inflation remains subdued, benefiting overall inflation rate,†Owiny said.
Ends
INFLATION is set to stay at current levels despite a recent upsurge which halted its nine-month consecutive decline, analysts have said.
Inflation is the measure of rising prices across the board. Annual headline inflation has been declining since last June bottoming out in April when inflation was 0.4% before rising to 1.4% in May.
Uganda Bureau of Statistics officials attributed the rise in inflation to increases in food, oil and charcoal prices in the past two months.
“The rise in April food prices after nine consecutive months of decline should not be of great concern as favourable weather conditions point towards largely subdued food inflation during the remainder of the year,†Stanbic Investment Management Services (SIMS) said in a recent report.
“There is still a likelihood that the overall inflation rate will fall below 0.1%, but this largely depends on April’s jump in food prices being reversed over the coming months,†Martin Owiny, managing director SIMS said.
Owiny said although inflation will rise towards the end of the year, the rate will remain largely subdued, ending the year at around 4%, which is below the 5% target set by the Government last year.
There has been a slight increase in domestic fuel prices since the beginning of this year due to rising prices of crude oil in the world market.
However the strong shilling exchange rate partly offset the impact of high global oil prices.
The threat of inflation from this front has increased over the past few weeks. But economists expect seasonal factors to push global oil prices lower during the second and third quarters of the year.
“This, with the steady shilling exchange rate, will ensure that imported inflation remains subdued, benefiting overall inflation rate,†Owiny said.
Ends