The Inflation rate in Uganda has decreased to 5.1% in the year ending July 2016 compared to 5.9% recorded the year ended June 2016. This is according to the latest Consumer Prices Index released by the Uganda Bureau of Statistics (UBOS).
The Director Macro Statistics at UBOS, Fred Mukisa said that Annual Core Inflation reduced to 5.7% in July compared to 6.8% recorded in the year ended June 2016. Mukisa attributed the decline in Core Inflation to a decrease in the inflation of other goods which decreased to 5.8% in July compared to 7.4% recorded in the year ended June 2016.
Mr. Mukisa attributed the decrease in inflation to the decline in Annual Core Inflation which reduced due to a decrease in inflation for other good as well as a decrease in Annual Services inflation.
He said in general, the inflation rate for manufactured goods, fuel and lubricants, food crops a part vegetables, edible oils among others for which other goods are measured reduced in the year ending July 2016.
The other driving factor which contributed to decline in Annual Headline inflation was the decline in Annual Services inflation which decreased from to 5.5% in the year ending July compared to 6.2% recorded in the year ended in June 2016. Mukisa attributed the decrease in inflation for Annual Services to the decline in inflation for services such as hotel and restaurants.
Similarly, the decrease in Annual Energy, Fuel and Utilities (EFU) Inflation was a key factor that led to the decrease in the overall inflation rate.
Mr. Mukisa said Annual EFU inflation decreased to 2.1% in the year ending July compared to 6.6% recorded in June which, according to him, was brought by a decrease in Annual inflation for petrol which reduced by a negative 10.8% in July compared to a negative 7.2% recorded in June.
The rate at which prices for Diesel increase, reduced to a negative 10.9% compared to a negative 7.2% recorded in June while inflation for kerosene decreased as well from a negative 7.7% recorded in June 2016 to 7.0% in July.
However, though there was a general decrease in inflation in most baskets for which overall inflation is computed, Annual Food Crop inflation registered an increase of 3.5% in July compared to a negative 1.3% recorded in the year ended June 2016. This was attributed to increase in the prices of vegetables which increased to 14.6% in July compared to 3.1% recorded in June 2016.
The West Nile Region, in a particular, Arua Inflation measurement center, registered the highest annual inflation of 6.7% in July compared to an earlier increase of 7.5% recorded in the year ended June 2016.
UBOS attributed the increase of inflation in this center to the rise in inflation of miscellaneous goods and services which increase to 10.9% in July 2016. This was caused by increase in inflation for restaurants and hotels that increased to 10.7% in July compared to an earlier increase of 13.1% recorded in the year ended June 2016.
Mukisa said though Annual Headline Inflation reduced; overall the prices for goods and services in July 2016 still remained high in July 2016 when compared to the same period last year.