INFLATION dipped slightly from 10.7% to 10% the Uganda Bureau of Statistics (UBOS) announced yesterday
INFLATION dipped slightly from 10.7% to 10% the Uganda Bureau of Statistics (UBOS) announced yesterday.
This comes after a steady rise which started in September last year. In April the rate topped 10.9%, the highest in five years.
Lower prices for food is largely responsible for the drop. â€œWith good harvests expected, the inflation rate is likely to go back to single digit in the near future,â€ Mathew Sewanyana, Director Macroeconomic statistics UBOS said during a briefing.
With the Consumer Price Index (CPI) showing a fall in inflation for two consecutive months, prices for several goods and services will drop in the near future. CPI is a measure of inflation based on the changing cost of a fixed basket of goods and services consumed by households.
Sewanyana attributed the positive development to the good rains in most parts of the in a very good harvest.
â€œWe can possibly hope for a lower inflation in the coming months. Once there is a very good harvest, we expect food prices to fall. Harvesting season has started and we expect a very good supply of staple foods as well as fruits and vegetables,â€ he said.
He however, warned that increase in fuel taxes and the high demand for maize and beans in the neighbouring countries might reduce on the domestic supply.
â€œKenya has had a poor crop year, resulting in high demand of maize and beans. The exports to that country and meeting the demand from World Food Program (WFP) will certainly create a shortage in domestic supply,â€ Sewanyana said.
The monthly headline inflation rate for June declined by 0.7% compared to a 0.2% rise that was recorded in May.
Inflation goes down