Bank of Uganda has reported a further decline in annual inflation on account of the efficacy of monetary policies implemented by the Central Bank.
Release of the Consumer Price Index for August 2023 announced a drop in annual Headline Inflation and Core Inflation for August 2023.
Both have slowed to 3.5% and 3.3% from 3.9% and 3.8% respectively as recorded in July 2023.
“This reduction validates the efficacy of Bank of Uganda’s monetary policy framework – Inflation Targeting – and the Bank’s commitment to socio-economic development,” reads the release.
The slowdown in Annual inflation is largely attributed to Annual core inflation which stands at 3.3% for August 2023.
Annual Core Inflation is the overall price increases excluding prices of items that change rapidly and are beyond the control of policy like food crops, oil prices and administered prices like electricity and water.
This decline is mainly attributed to the slowdown in price increases of certain items like rice, maize flour, pounded groundnuts, beef, mukene and passenger transport services.
Lower price increases in petrol, diesel and firewood also contributed to this slowdown in Annual Inflation.
The key inflation drivers, however, remained in the food crops category especially with increased prices of onions, mangoes, pawpaws, fresh beans and oranges.
The downward trend started in July where Annual Headline inflation dropped to 3.9% from 4.9% in June and Core inflation to 3.8% from 4.8% in June.
Food crops inflation was 12.3% in June but dropped significantly to 9.3% in July but has however, risen to 9.8% mainly due to rising prices of onions.