Optimism as Sugar Prices Bring Down Inflation

Inflation in the country has dropped to 2.1 per cent for the year ended August, the lowest rate since the year began.

According to data released by Uganda Bureau of Statistics (Ubos), the decline is largely a result of a drop in core inflation, which dropped to 2.7 per cent for the year ended August from 3.5 per cent in July.

Mr Vicente Musoke Nsubuga, the Ubos principal statistician for price statistics, said the decline was influenced by a reduction in the increase of other goods inflation, key among them clothing and footwear, which decreased to 4.6 per cent in August from 5.4 per cent in July.

Sugar inflation, he said, declined to – 13.4 per cent in the period from – 4.2 per cent in July.

“Another driver is the services inflation that declined to 1.5 per cent for the year ending August compared to 2.1 per cent recorded in July,” he said, explaining that the movement sugar prices heavily impacts the Consumer Price Index.

Sugar prices have been stable, selling at an average of Shs3,500, which indicates a – 2 per cent decline.

During the period, Mr Nsubuga said, second hand shirts prices also declined by 5 per cent.

Food crops-related inflation decelerated further to – 1.4 per cent for the year ended August compared to – 0.8 per cent in July, which according to Mr Nsubuga, was mainly driven by a fall in vegetables inflation to 3.2 per cent in August to 5.1 per cent in July.


However, he noted, fruits inflation had increased in the period to 9.5 per cent compared to – 11.1 per cent recorded in July. This was mainly attributed on seasonal factors.

Annual Energy, Fuels and Utilities inflation, a key driver of inflation, increased to 1 per cent in August from 0.9 per cent in July.

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