Relief for Ugandan households as inflation eases slightly in July

Ugandan households are beginning to feel some relief from the burden of rising living costs, thanks to a slowdown in food and transport price increases.

According to the latest Consumer Price Index report by the Uganda Bureau of Statistics (UBOS), the country’s annual inflation rate dropped slightly to 3.8% in July 2025, down from 3.9% in June.

While the decline may seem marginal, it signals that the rate at which prices are increasing has slowed—offering a measure of stability for consumers.

The easing inflation has been largely driven by slower increases—or even outright declines—in the prices of essential goods and services. Food, which accounts for a significant portion of household spending in Uganda, saw notable changes. For instance, tomato prices dropped by 8.1% in July, reversing a 0.9% increase in June. Similarly, Irish potatoes fell by 4.6%, and matoke prices, though still high, grew at a slower rate of 35.3%, compared to 37.7% the previous month.

Other food items also reflected a cooling trend. Milk prices rose by 3.6%, a considerable drop from the 8.9% spike in June, while dry beans increased by 8.3%, down from 12.1%. These shifts helped push down the food inflation rate to 3.2% in July, from 4.7% in June—a welcome development for families that rely on local markets for their daily meals.

Transport costs, another major household expenditure, also continued to decline. Public transport fares—including taxis and buses—fell by 3.5% in July, an improvement from the 2.7% drop in June. The downward trend in fuel prices contributed to this: petrol prices fell by 6.2%, diesel by 3.4%, and kerosene by 3.5%. Electricity bills also eased, with a 4.3% decline following a 5.7% drop the previous month. This overall trend brought the “Energy, Fuel, and Utilities” category to a flat rate (0.0%) in July, improving from a 0.2% decrease in June.

Despite the overall positive outlook, some essential items remain on the rise. Sugar prices surged by 9.6%, more than double June’s 3.9% increase. Maize flour, a staple for many households, rose by 13.8%, up from 12.6%.

Meanwhile, mukene (silverfish) prices continued to decline, though at a slower rate—12.8% in July compared to 15.7% in June. Prices of “other goods,” including packaged foods, soap, and beverages, remained stable at 3.7%, unchanged from the previous month.

Regional differences in inflation also stood out. Masaka recorded the highest rate at 5.1%, driven by increased transport and healthcare costs. In contrast, Mbale experienced the lowest inflation rate at 0.2%, benefiting from falling food and fuel prices. In Kampala’s high-income zones, inflation rose slightly to 4.9%, up from 4.8%, mainly due to rising costs in restaurants and prepared foods.

The current inflation rate remains within a comfortable range for policymakers. The Bank of Uganda’s medium-term inflation target is 5%, and the latest figure of 3.8% suggests the situation is stable and under control, even if some goods continue to climb in price.

While inflation is not falling dramatically, the easing pace offers cautious optimism for Ugandan consumers. With food and transport prices stabilizing, households may find a little more breathing room in the months ahead.