Inflation goes down
INFLATION dipped slightly from 10.7% to 10% the Uganda Bureau of Statistics (UBOS) announced yesterday
By Steven Odeu
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. “With good harvests expected, the inflation rate is likely to go back to single digit in the near future,†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.
“We 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,†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.
“Kenya 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,†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 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. “With good harvests expected, the inflation rate is likely to go back to single digit in the near future,†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.
“We 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,†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.
“Kenya 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,†Sewanyana said.
The monthly headline inflation rate for June declined by 0.7% compared to a 0.2% rise that was recorded in May.