Inflation declines to 6.2% in May

Kampala, Uganda | JULIUS BUSINGE | Uganda’s annual headline inflation decreased from 8.0% for the year ended April 2023 to 6.2% for the year ended May according to data released by Uganda Bureau of Statistics Executive Director Chris Mukiza on May 31.

The slowdown in inflation is largely attributed to the annual core inflation which slowed down 5.6% in the year ended May 2023 compared to 6.8% registered in the year ended April 2023. The main driver of annual core inflation was the annual other goods inflation.

The main drivers were maize flour, rice, cassava flour, and laundry soap bar inflation. Annual services inflation also declined to 3.4% in the year ended May 2023 compared to 4.3% registered in the year ended April 2023.

This is attributed to the annual transport inflation that decelerated in May 2023 compared to the year before. The other driver to the slowdown in annual inflation was the annual food crops inflation and related items inflation that registered 15.7% in the year ended May 2023 compared to 25.3% registered in the year ended April 2023 attributed to tomatoes, cooking bananas, sweet potatoes and beans inflation.

In addition, the annual energy and fuel utilities (EFU) inflation slowed down to 0.9% in the year ended May 2023 compared to 2.1% registered in the year ended April 2023 this was driven by liquid energy fuels (diesel and petro) inflation that registered at negative 4.4% in May 2023 compared to 7.3% a year before.

The 5.6% core inflation registered at the end of May is slightly higher than the Bank of Uganda (BoU) policy target of 5%. The public will wait for BoU’s response on the central bank rate (currently at 10%) in its next monetary policy meeting.