Uganda closes 2024 with inflation at 3.3%

Uganda closed the year 2024 with inflation at 3.3%, according to the Uganda Bureau of Statistics (UBOS).

Samuel Echoku,  the UBOS Head of Macroeconomic Statistics, who released the statistics on Tuesday, said Uganda  registered headline inflation of 3.3 percent for December 31, 2024 compared to 4.2 percent recorded in December 2023.

However, the 3.3% is higher than the 2.9% recorded in November 2024.

Some of the key drivers of December inflation were passenger transport by road Inflation, which increased to 1.6% from 1.2% of November 2024. Restaurants and accommodation services inflation also increased to 4.8% from the 3.8% of November 2024.

“The main driver of annual core inflation is the annual services inflation recorded at 6.1 percent in December 2024 compared to 5.9 percent in November 2024,” Echoku said.

The annual food crops and related items inflation recorded -0.7 percent in the year ending December 2024 compared to a minus 4.0 percent  registered for November .

This was mainly attributed to a drop in prices of fresh leaf vegetables by -11.6 percent compared to 0.6 percent in November also a drop in prices of fresh beans, tomatoes, egg plants, carrots and Irish potatoes.

Energy and fuel costs, a critical factor influencing Uganda’s economy, recorded significant volatility. Annual Energy, Fuel, and Utilities (EFU) Inflation stood at 1.0 percent in December, down from 2.2 percent in November. While lower charcoal prices contributed to this decline, fluctuations in liquid fuel prices, especially petrol and diesel, remained a concern.   

The improved agricultural yields due to favourable weather conditions contributed to increased crop production, alleviating the pressure on food prices. However, challenges remain, particularly with perishables like tomatoes and onions, which saw significant price swings. 

The other is policy Interventions, such as measures introduced by the Bank of Uganda to manage liquidity and curb inflationary pressures in the aftermath of global economic shocks have been effective. Interest rate policies and government subsidies in certain sectors also played a role in stabilizing costs.

According to UBOS, despite these gains, Uganda’s inflationary environment continues to exhibit vulnerabilities. The service sector, including transportation and accommodation, remains susceptible to inflationary pressures, with passenger transport prices increasing steadily over the year.

Similarly, costs in education and healthcare, both essential sectors registered minimal declines but remain high relative to household incomes.