Inflation eases as food prices drop

The consumer price index released by Uganda Bureau of Statistics shows Uganda’s annual head inflation rate for the year ending November 2009 dropped to 12.0 per cent from 13.4 per cent registered in October- prompting that the double digit inflation the country has experienced for the last seventeen months could drop to single digit.

Kampala

The country is experiencing low inflationary pressure. This follows a two months consecutive decline in inflation resulting from decreasing food prices.

The consumer price index released by Uganda Bureau of Statistics shows Uganda’s annual head inflation rate for the year ending November 2009 dropped to 12.0 per cent from 13.4 per cent registered in October- prompting that the double digit inflation the country has experienced for the last seventeen months could drop to single digit.

Higher Inflation rate has been a principle concern of the policy makers as central bank tries introduce monetary policy tools to control the rising inflation.

The higher digits have also been of worry to consumers as it has forced the public to adjust on their budgets particularly on food to cope with the increasing prices against constant wages.
Higher inflation has also been a concern to the investors in the country.

While the prices of goods could still remain high, the Uganda Bureau of Statistics says Uganda’s inflation is headed for a single digit, a situation likely to ease pressure on the economy.
The principal Statistician at UBOS, Mr Vicente Nsubuga Musoke said while releasing the Price Consumer Index for the month of November on Monday that there was a likelihood the country would experience high but stable prices.

“A low inflation does not necessarily mean low prices as such. High and stable prices lead to low inflation. For instance in the developed countries prices are high but they have low inflation because of stability in the prices of goods and services,” said Mr Nsubuga.

High inflation in Uganda has been blamed on high food prices as opposed to money supply.

However, the current figures indicate that annual food crops inflation for the year ending November 2009 also decrease to 35.5 per cent from 39.0 per cent in October.

The statistics indicated that, though food remains the main driver of inflation in Uganda, overall index in food driven inflation fell from 26.4 per cent to 22.6 per cent.

UBOS said during the month, food prices reduced by 0.5 per cent due to significant reductions in prices of most fresh vegetables, beans chickens, fish and milk.

The decrease in prices of food items above is mainly attributed to increased supplies.