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Inflation drops to 2.7%

By Vision Reporter

Added 3rd September 2007 03:00 AM

FOR the first time in three years, the annual headline inflation rate has plunged to 2.7% for August from 4.2% in July. “This is the lowest inflation rate recorded since July 2004’s which was 1.8%,” Matthew Ssewanyana, the Uganda Bureau of Statistics director of macro-economics statistics, sai

FOR the first time in three years, the annual headline inflation rate has plunged to 2.7% for August from 4.2% in July. “This is the lowest inflation rate recorded since July 2004’s which was 1.8%,” Matthew Ssewanyana, the Uganda Bureau of Statistics director of macro-economics statistics, sai

By Alice Kiingi

FOR the first time in three years, the annual headline inflation rate has plunged to 2.7% for August from 4.2% in July. “This is the lowest inflation rate recorded since July 2004’s which was 1.8%,” Matthew Ssewanyana, the Uganda Bureau of Statistics director of macro-economics statistics, said.

According to the latest Consumer Price Index (CPI), the drop was mainly attributed to lower prices of food especially staple foods plus some fruits and vegetables due to increased supply during harvesting.

“The plunge is reflected in some months of previous years. Prices of food crops have been going down since the beginning of January to April. In May, they slightly went up. Since then, we have been experiencing a downward trend,” Ssewanyana said. He said fuel prices had a big impact on the transport fares.

Ssewanyana said the underlying inflation rate, which excludes food crops from the CPI basket, stood at 6.7% from 6.8% in July.

“The 1% decline is attributed to slight reduction in primary and secondary day school fees dues in Jinja, Mbale, Mbarara,” he explained.

Ssewanyana anticipated that the Commonwealth meeting (CHOGM) is likely to push inflation up.

“The impact of CHOGM has started creating an employment boom in different sectors. This means increased earnings will increase prices of goods and services. If production doesn’t increase in the same direction, it will raise the inflation rate.”

Inflation drops to 2.7%

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