Uganda closes 2023 with inflation at 2.6 percent

Uganda’s annual inflation as measured by the Consumer Price Index for the 12 months to December 2023 stayed at 2.6 percent, the same rate registered in November 2023.

While releasing the CPI for December on Friday, UBOS Director Macro-Economic Statistics Aliziki Kaudha Lubega said the main driver to inflation was the rise in prices of services that increased to 3.7 percent in the year ending December 2023 compared to 2.8 percent registered in the year ended November 2023.

The increase in the annual services inflation was due to annual passenger transport by road fares that increased by 4.3 percent in the year ending December 2023 compared to minus 4.4 percent registered in November 2023 and the Annual Passenger transport by air fares that registered minus 3.1 percent in the year ending December 2023 compared to minus 5.1 percent registered in the year ended November 2023.

Annual other goods inflation increased at a slower rate of 1.2 percent in the year ending December 2023 compared to 1.4 percent in the year ended November 2023.

The main drivers were motorcycle prices which increased by 36.2 percent in the year ending December 2023 compared to minus 7.2 percent registered in the year ended November 2023.

Prices of rice increased by 1.3 percent in the year ending December 2023 compared to minus 1.7 percent in the year ended November 2023, and smoked tilapia prices increased by 11.0 percent in the year ending December 2023 compared to 4.2 percent in the year ended November 2023.

Annual Energy Fuel and Utilities (EFU) inflation increased to 6.4 percent in the year ending December 2023 compared to 4.3 percent registered in the year ended November 2023.

This was due to the increase in price of charcoal by 24.7 percent in December 2023 compared to 16.7 percent in November 2023, Petrol prices increased by 0.6 percent in December 2023 compared to minus 3.9 percent in November 2023.

Annual Food Crops and Related Items Inflation increased at a slower rate of 2.5 percent in the year ending December 2023 compared to 6.4 percent registered in the year ended November 2023.

This was attributed to increase in the prices of Green Cabbage by 10.3 percent in the year ending December 2023 compared to minus 3.3 percent registered in November 2023. Dry Bean prices increased by 13.4 percent in the year ending December 2023 compared to 11.4 percent in the year ended November 2023.

Watermelon prices increased by 19.4 percent in the year ending December 2023 compared to minus 0.1 percent recorded in the year ended November 2023, and Carrot prices increased by 28.8 percent in the year ending December 2023 compared to 18.0 percent registered in the year ended November 2023.

Analysis by geographical areas and income groups revealed that Arua registered the highest inflation of 5.5 percent for the 12 months to December 2023 compared to 3.7 percent recorded in November 2023. This was mainly driven by Annual ‘Food and non-alcoholic beverages’ inflation that increased to 4.3 percent in December 2023 compared to 1.4 percent registered in November 2023. In addition, Annual ‘Transport’ inflation increased to 5.3 percent in December 2023 compared to minus 0.8 percent registered in November 2023, see Figure 2 below. The second highest Annual Inflation was registered in Jinja Centre at 4.6 percent for the year ending December 2023 compared to 4.0 percent recorded in November 2023. This was mainly driven by Annual ‘Transport’ inflation that increased to 7.9 percent in December 2023 compared to 1.1 percent in November 2023. In addition, annual ‘Housing, Water, Electricity, Gas and other fuels’ inflation increased to 7.4 percent in December 2023 compared to 5.5 percent registered in November 2023.

The least annual inflation was registered in Kampala Middle Income at 1.1 percent for the year ending December 2023 compared to 1.3 percent recorded in November 2023. This was mainly due to the annual inflation for ‘Food and Non-Alcoholic Beverages’ that decreased to minus 2.0 percent in December 2023 compared to 0.5 percent registered in November 2023.