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Plain textFear Of Sinking Economy Sweeps Nation
The Bank of Uganda is today expected to announce new banking rates to stem the headline inflation that has left small bussinesses in turmoil and cost of living unbearable.
Economic experts have hugely predicted an increment in lending rates as a measure to stop the fast-skyrocketing inflation rates.
Governor Emmanuel Tumusiime will today tell press how he expects to control the inflation animal as opposition steps up effort to press government for quick and helpful solutions to the deepening crisis.
The press briefing will be held at Bank of Uganda.
Uganda government is facing an economic dillemma after headline inflation soared from 28.3 percent in September to 30.5 percent by close of October, Uganda Bureau of Statistics has revealed.
Despite assurances from Governor Bank of Uganda Emmanuel Mutebile that Central Bank was in full control of economy, experts are beginning to suggest that indeed the country is in a crisis.
"If you asked me whether our economy was in crisis, i would say -no," Mutebile told press at State House, Nakasero a fortnight ago.
Core inflation rose from 27.5 percent to 30.8 percent while food crop inflation went down from 38.8 percent to 35.3 percent, signalling a relief among urban dwellers who had been hit hardest by increased food prices.
Deputy Secretary to Treasury Keith Muhakanizi says government has steppped up efforts to control inflation.
"As you can see food prices have gone down. We have increased credit interest rates to control money in circulation. I can assure you in a few months, we shall control this animal called inflation," he said.
The consumer price index skyrocketed to 1.3 percent thus propelling headline inflation rate to a staggering 30.5 percent. This is the highest inflation rate since January 1993.
The high rates were spotted mainly in the rising cost of clothing and footwear, which were up 5.8 percent, and rent, fuel and utilities, up 4.6 percent.
Bank of Uganda slammed on the monetary brakes on October 4 with a four percentage point hike in the Central Bank Rate (CBR) rate aimed at reining in high inflation.
BoU raised the CBR to 20 percent from 16 percent in September and pledged to tighten policy further if needed in the face of stubborn price pressures linked to high food costs and dear imports including oil.
Mutebile said then the Bank was determined to combat inflation, which had at the time leapt to 28.3 percent in September, the highest level since January 1993.
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Updated on 2013-05-09 09:25 |
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