Inflation rises to 6.2 per cent

Thursday October 01 2020

Passengers flock without wearing facemasks in the New Taxi Park in Kampala on August 13. According to Ubos, Uganda's annual core inflation has been rising since June mainly because of Transport Services- inflation. PHOTO/ KELVIN ATUHAIRE


Annual core inflation has risen to 6.2 per cent for the year ending September from 5.9 per cent in August.

The increase was occasioned by the high transport costs that resulted from a reduction in capacity requirements in June as the government sought to reduce the spread of Covid-19. 

Data from Uganda Bureau of Statistics (Ubos) indicates that 14-seater passenger vans otherwise known as taxi fares for short distance of less than 50 kilometre increased by 16.49 per cent, while taxi fare for medium distance of between 51 and 100 kilometres  rose by 7.98 per cent. 

The increase means, Ugandans are spending more on transport services.  
Speaking in Kampala yesterday, Ms Aliziki Kaundha Lubega, Ubos director for macroeconomic statistics, said annual core inflation had been rising since June mainly because of transport services inflation.

During the period, she said, annual service inflation rose to 11.6 per cent compared to 9.6 per cent in August due to spike in transport services inflation which rose to 62.5 per cent from 50.7 per cent in the period.  

Ms Aliziki also noted that purchase of motor vehicle inflation increased to 3.2 per cent for the period ended September compared to 1.4 per cent in August while operation of personal transport equipment inflation rose to - 0.1 per cent from 0.4 per cent. 


Public service vans currently carry half the capacity they had been carrying before Covid-19. Bank of Uganda uses core inflation with the target of maintaining it below 5 per cent in order to maintain price stability in the economy.  

Core inflation is expected to peak at 6.1 per cent in the first quarter of 2021, while headline inflation could peak at 6.2 per cent. 
However,  headlines inflation during the period declined to 4.5 per cent compared to the 4.6 per cent in August.  

The decrease, Ms Aliziki said, was mainly due to annual food crops and related items inflation, which decelerated - 6.2 per cent in September from - 5.4 per cent in August.  

However, the annual inflation for fruits increased to - 8.9 per cent from - 12.3 per cent in August. It should be noted that during the period some food items such as bananas and mangoes registered an increase in prices. 

For instance, the price of bananas (matooke) increased by 16.99 per cent while that of mangos rose by 16.54 per cent. Dried cassava prices rose by 9.35 per cent while sorghum grains registered an 8.67 per cent increase in prices. Pumpkin, whole cassava and Nile perch fresh registered a price increase of 5.28 per cent, 5.17 per cent and 5.08 per cent, respectively.