13 September 2017

Uganda: August Inflation Drops in Uganda, Rises in Kenya

Uganda recorded a drop in headline inflation in August due to a fall in food prices.

Kenya, on the other hand, saw a rise during the same month, driven by an increase in food prices occasioned by depressed rains and low supplies.

According to the Uganda Bureau of Statistics, the country's year-on-year inflation edged down to 5.2 per cent in August from 5.7 per cent the previous month.

In Kenya, inflation increased to 8.04 per cent in August from 7.47 per cent in July attributed to an increase in the food and non-alcoholic drinks index.

Inflation in July 2017 had returned to the Central Bank's desired band of 2.5 per cent either side of the five per cent target -- at 7.47 per cent.

This was driven by a reduction in food prices including a range of fresh produce as well as cheaper sugar, milk and maize flour relatively to June 2017.

Energy prices also fell over the same period with kerosene, electricity and fuel becoming more affordable.

Same lending rate

Uganda's central bank maintained its benchmark lending rate at 10 per cent in August, saying that while economic activity was picking up, inflation remained on course for its medium-term target of 5 per cent.

Uganda Bureau of Statistics said prices had declined mainly for fruits while core inflation was driven down by a slower rise in the prices of services without elaborating.

In the basket of goods used to calculate inflation, food takes up the largest share -- 36 per cent -- making it the main driver of the cost of living, followed by utilities such as rent, water, electricity, gas and fuels at 18 per cent.

In Tanzania's year-on-year inflation slowed to 5.2 per cent in July from 5.4 per cent a month earlier, largely due to slower rises in food prices of cereals, fish, beans .

Rwanda's inflation fell to 3.5 per cent year-on-year in July from 4.8 per cent a month earlier.

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