The Monitor (Kampala)
Martin Luther Oketch
3 November 2009
Kampala — Uganda's balance of payments surplus shrank to $37.2 million in August from $84.8 million July, largely due to a decline in exports, the central bank said last week.
The state of economy report for the month of August shows that overall, balance of payments position was estimated at a surplus of $37.2 million in August 2009, compared to surpluses of $84.8 million in July 2009 and $8.3 million registered in August 2008, respectively.
Balance of Payment is a record of all transactions made between one particular country and all other countries during a specified period of time.
Balance of payment compares the dollar difference of the amount of exports and imports, including all financial exports and imports.
The central bank explains that although there has been a decline, Uganda's economy is still in strong position because it is still registering surpluses on its trade account.
The month-on-month decline followed a 2.5 percent jump in the consumer price index in September and trimmed the annual average inflation rate to 13.3 per cent in October from 14.6 per cent a month earlier.
"During the month food prices reduced by 1.1 percent due to significant reductions in prices of most fresh vegetables and milk," the statistics bureau said in a statement.
"The decreases in food prices are mainly attributed to increased supplies to the markets due to the current rainy conditions in most parts of the country," it said.
Annual underlying inflation, which excludes food crops, fuel, electricity and metered water supplies, also slowed to 9.1 percent for the year ending October from 9.9 percent in September.
Like neighbouring east African nations, Uganda has suffered a duel impact from high commodity and fuel costs and the global downturn.
The inflation rate broke into double digits in May last year after averaging about 5 percent for the previous two decades.
While headline inflation rates in the region have fallen in recent months, food prices have remained stubbornly high due to drought-related shortages. Analysts had been expecting food prices to start falling when seasonal rains started.
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