Uganda, the third largest economy in East Africa has recorded a marginal decline in headline inflation at 4.9% in January 2013 from the revised 5.3%, a month earlier, the Uganda Bureau of Statistics announced on Jan. 31.
The decline was largely attributed to the drop in food price inflation as well as other components of the consumer price index. Food price annual rate of inflation decreased to 3.0% for the year ending Jan. 2013 compared to the 7.3% for the year ended Dec. 2012.
The Bureau said the energy, fuel and utilities annual inflation reduced to a minus 2.1% for the year ending Jan. 2013 compared to the 9.0% (revised) registered for the year ended Dec. 2012.
However, the annual core inflation rate, which excludes food crops, fuel, electricity and metered water rose to 5.6% for the year ending Jan. 2013 compared to 4.6% recorded for the year ended Dec. 2012.
The country's inflation has stablised within the single digit level in recent months after it spiked to 30.4% at the end of 2011 before it recorded substantial reductions to the current level.
Experts say this is good news for the economy, which is expected to grow at over 5% at the end of 2012/13 financial year from just 3.2% growth posted in 2011/12.
The Central Bank is expected to announce the Central Bank Rate (CBR) for February soon.
The CBR is set monthly by the central bank with the aim of influencing the movements in the commercial bank lending rates in the market.