Business

Uganda’s Inflation for July Drops to 5.7%

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This drop is attributed to a decrease in Food Crops' Inflation

Uganda Bureau of Statistics has released the Uganda Consumer  Price Index (CPI) for the month of July 2017 showing a decline in the Annual Headline Inflation for the year ending July 2017 is 5.7% compared to the 6.4% recorded during the year ended June 2017.

This represents a 0.7% point drop from the previous month.

This drop is attributed to a decrease in Food Crops’ Inflation which decreased to 12.9% from 18.1% for the year ended June 2017.

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The drivers for the lower Annual Food Crops Inflation were Vegetables and fruits. Also there has been an increased supply of foods due to somewhat stabilized weather conditions compared to last year at the same time.

The Annual Inflation for Health also dropped to 1.2% for the year ending July 2017 compared to 1.4% registered for the year ended June 2017.

The Annual Inflation for Hospital Services dropped to 2.9 from to 4.0% registered in June 2017.

However, Outpatient Services inflation increased to 1.4% from 1.2 in June. This drop is attributed to government removing taxes on hospital equipment in this year’s budget.

Ben Paul Mungyereza, the executive director who signed the report said this is a good indicator for this financial year as the food prices are expected to drop even further as the weather conditions stabilizes even more.

“The drop in inflation is good and we even hope to see better numbers for this financial year. We are starting on a good note,” Mungyereza said.

The report also indicates that there was an increase in Services Inflation, from 3.9% in June 2017 to 4.0% for the year ending July 2017 compared to 3.9 percent recorded for the year ended June 2017.

Also The Annual Energy, Fuels and Utilities (EFU) Inflation increased to 7.8% for the year ending July 2017 compared to the 5.7%recorded during the year ended June 2017.

The drivers for the increase were solid fuels (charcoal & firewood) that recorded an increase to 6.7% compared to 2.7% recorded in June 2017. In particular, diesel inflation declined to 14.8 percent for the year ending July 2017 compared to 21.9 percent recorded in June.

Housing, Water, Electricity, Gas and other Fuels increased to 5% from 3.6% recorded for June. The increase was attributed to Inflation of Electricity, Gas and Other Fuels.

It is also indicated that districts of Fort Portal, Guru and Arua registered the highest inflation respectively mainly due to increased prices for food stuffs and soft drinks.

Fort Portal registered the highest Annual Inflation of 9.9 percent for the year ending July 2017 compared to the 9.6% recorded for the year ended June 2017. Gulu is second with an increase in inflation to 9% July compared to 8% recorded in June.

Arua registered the third highest annual inflation of 7.7 percent for the year ending July 2017, though, lower than 9.1 percent recorded for the year ended June 2017.

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