Uganda has lowest inflation among reporting EAC states but highest borrowing costs, bulletin shows

Uganda recorded the lowest annual headline inflation in June 2026 among the East African Community (EAC) Partner States covered by the regional price index, but it also had the highest Treasury bill and lending rates among reporting states, according to the EAC Quarterly Statistics Bulletin for April–June 2026.

The bulletin puts Uganda’s annual headline inflation at 3.7 per cent in June, measured by the EAC Harmonised Consumer Price Index (EAC-HCPI).

Tanzania followed at 4.0 per cent, Kenya at 6.5 per cent and Burundi at 8.0 per cent. Rwanda and South Sudan both recorded 13.0 per cent. South Sudan’s rate fell from 23.1 per cent in May, while Rwanda’s did not change.

Despite the low inflation, borrowing in Uganda remained the most expensive among the reporting states. The bulletin shows Uganda’s 91-day Treasury bill rate stood at 10.2 per cent, the highest among the reporting Partner States.

Uganda’s lending rate fell from 18.9 per cent to 16.9 per cent. According to the bulletin, it was still the highest among the reporting states. Deposit rates in Uganda also declined.

Other states moved in different directions. Compared with the first quarter, Tanzania’s 91-day Treasury bill rate fell 60 basis points to 3.6 per cent, the largest decline. Kenya’s rose 120 basis points to 8.7 per cent, the largest increase.

Lending rates rose in Tanzania, Burundi and Rwanda, and fell in Kenya, Uganda and South Sudan. Rwanda’s lending rate rose 30 basis points to 14.4 per cent, the largest increase among the reporting states.

Deposit rates rose in Tanzania, Burundi and Rwanda, fell in Kenya and Uganda, and did not change in South Sudan.

The gap between lending and deposit rates varied widely. South Sudan had the widest spread at 15.6 percentage points, while Rwanda had the narrowest at 4.3 percentage points.

Across the region, headline inflation eased during the quarter, falling from 11.1 per cent in April to 10.7 per cent in May and 7.8 per cent in June. The June figure compares with 22.7 per cent a year earlier. Prices fell 0.8 per cent month-on-month in June, after rising 1.2 per cent in May.

Core inflation, which excludes selected items with volatile prices, rose from 6.2 per cent in April to 7.0 per cent in June. It remained well below the 19.3 per cent recorded in June 2025.

Food inflation rose to 10.1 per cent in June from 9.5 per cent in May, compared with 37.5 per cent a year earlier. Inflation in energy, fuel and utilities eased to 11.1 per cent from 14.2 per cent, but remained above the 6.3 per cent recorded in June 2025.

For the 2025/26 financial year, average regional headline inflation fell to 14.2 per cent from 23.0 per cent in 2024/25. The bulletin attributes the fall to slower price growth in South Sudan, where average inflation dropped from 179.4 per cent to 43.2 per cent, and in Burundi, where it fell from 33.3 per cent to 18.0 per cent.

Credit to the private sector across the region rose 15.0 per cent year-on-year to USD 75.9 billion. Lending to wholesale and retail trade grew 29.1 per cent, agriculture 25.6 per cent and construction 22.9 per cent. Real estate lending rose 6.2 per cent, while lending to manufacturing grew 0.9 per cent.

Households held the largest share of outstanding loans at USD 17.6 billion, followed by wholesale and retail trade at USD 11.6 billion.

Broad money supply (M3) rose 15.3 per cent to USD 107.7 billion, and net foreign assets increased 19.0 per cent to USD 25.4 billion. Net credit to central governments rose 7.5 per cent to USD 37.5 billion, while net credit to public non-financial corporations fell 3.1 per cent to USD 0.65 billion.

The bulletin also shows that total EAC trade rose 37.0 per cent to USD 52.3 billion in the quarter, from USD 38.2 billion a year earlier. Exports grew 41.3 per cent to USD 26.3 billion and imports rose 32.9 per cent to USD 26.0 billion, giving the region a trade surplus of USD 300 million, compared with a deficit of USD 945.3 million in the second quarter of 2025.