Rising food prices push up inflation

The Consumer Price Inflation (CPI) for Uganda for the 12 months to June 2021 rose by 2.0 per cent, up from 1.9 percent in May 2021, a new report shows.

CPI is a general indicator of price levels paid by households for consumer goods and services.

The report released by Uganda Bureau of Statistics (UBOS) on Thursday, July 1, 20201 attributes this to the increase in prices for food and non-alcoholic beverages.

According to the report, prices for food and non-alcoholic beverages increased to minus 1.6 percent for the 12 months to June 2021, up from minus 3.5 percent in May 2021.

In addition, annual inflation for housing, water, electricity, gas and other fuels increased to minus 1.5 percent in June 2021, up from minus 1.7 percent and furnishings, household equipment and routine household increased to 0.8 percent in June 2021, up from 0.4 percent in May 2021.

However, annual headline inflation for Transport is recorded at 15.9 percent for the 12 months to June 2021 down from 20.9 percent in May 2021. In addition, annual inflation for restaurants and accommodation services decreased to 0.2 in June 2021, down from 0.7 percent in May 2021 and personal care, social protection and miscellaneous goods decreased to 1.9 percent in June 2021, down from 2.3 percent in May 2021.

The annual average headline inflation for the Financial Year (FY) 2020/21 rose to 2.5 per cent, up from 2.3 percent in FY 2019/2020. The increase in the annual average headline inflation was due to annual average core inflation that rose to 3.5 percent for FY 2020/21, up from 2.3 percent in FY 2019/2020. However, Food Crops and related items Annual Average Inflation decreased to minus 4.3 percent for FY 2020/21 down from 3.7 percent in FY 2019/2020. Annual Average Inflation for Energy, Fuels and Utilities (EFU) also decreased to 0.9 percent in 2020/21 down from 1.5 percent in 2019/2020.

The Annual Core Inflation for the 12 months to June 2021 decreased to 2.7 percent down from 3.1 percent in May 2021. This is attributed to Annual Services Inflation that decreased to 5.3 percent in June 2021 down from 6.7 percent in May 2021. However, Annual Inflation for Other Goods for the 12 months to June 2021 increased to 0.6 percent up from 0.1 percent in May 2021.

The Annual Non-Core inflation for the 12 months to June 2021 increased to minus 2.4 percent up from minus 4.2 percent in May 2021. The increase in Annual Non-Core Inflation is mainly attributed to Annual Food Crops and Related Items Inflation that increased to minus 2.8 percent for the 12 months to June 2021, up from minus 5.7 percent in May 2021. In addition, Energy Fuel and Utilities Inflation (EFU) increased to minus 1.3 percent in June 2021 up from minus 2.3 percent in May 2021.