Food pushes up Uganda headline inflation to 3.6%

KAMPALA - Uganda's year-on-year inflation rate rose to 3.6 percent in the year to May from 3.4 percent a month earlier, official data showed on Friday.

Core inflation, which excludes food crops, fuel, electricity and metered water, dropped to 5.6 percent from 5.8 percent in April, the Uganda Bureau of Statistics (UBOS) said, leaving it above the bank's medium target of 5 percent.

The overall rate of inflation has been low in recent months, but underlying inflation has been above target since February, pointing to a continuation of a cautious stance by policymakers.

Uganda's central bank held its key interest rate in May at 12 percent for the fifth straight month, saying there were upside risks to rising inflation due to higher energy prices.

Food prices, which carry a 27.2 percent weighting in the consumer price index, fell 2.1 percent over the 12 months against a 2.6 percent fall a month earlier, the statistics office said in a statement.

"The increase (in headline inflation) was mainly attributed to a rise in prices of matooke, Irish potatoes, cassava, cabbages, tomatoes, carrots, oranges and onions in most centres mainly due to decreased supplies to the market," said UBOS.

Reuters