The decline in the annual inflation has been attributed to a steep drop in round onion prices, among other commodities. The Uganda Bureau of Statistics (UBOS) Consumer Price Index (CPI) report for the year ending August 2024 recorded headline inflation at 3.5 percent, down from 4.0 percent in the year ending July.
Onions experienced the most significant price drop, registering a decrease of 25.5 percent compared to the 29.6 percent decline recorded last month. This price drop also impacted the Annual Food Crops and Related Items inflation, under which it is categorized. This category registered a decline of 0.6 percent in August, compared to a 2.0 percent increase in July.
According to the report, other commodities within this category also recorded declines, except for cabbage. “Matooke decreased by 2.1 percent compared to a 3.6 percent increase in July 2024, fresh cassava dropped by 27.0 percent compared to a 21.0 percent decline in July 2024, and cabbage increased by 20.0 percent to 32.5 percent in July 2024,” the report noted.
The report also highlighted a reduction in the Annual Energy Fuel and Utilities category, which stood at 4.7 percent, down from 6.2 percent in July. This reduction was mainly due to a decrease in solid fuel inflation, which dropped by 9.4 percent in August compared to 13.3 percent in July 2024, largely driven by lower charcoal and firewood prices. Liquid energy fuel inflation also decreased to 3.8 percent in August, down from 5.1 percent in July.
A further decline was observed in annual services inflation, which reduced to 6.2 percent from 6.5 percent in July. The report attributes this decrease mainly to a drop in annual core inflation, influenced by a 1.3 percentage point decline in passenger transport services inflation. “Passenger transport services inflation registered at 6.9 percent in the year ending August 2024, compared to 8.2 percent in July 2024.”
Other contractions were recorded in Food and Beverage Serving Services inflation, which decreased to 2.7 percent from 3.8 percent in July. Financial services inflation also slowed to 4.3 percent in August, compared to 5.0 percent in the year ending July 2024.
Meanwhile, a slight increase of at least 1 percentage point was observed in the Annual Other Goods category due to the upward trend in commodity prices. “Annual Other Goods inflation was recorded at 2.1 percent, compared to 2.0 percent in July 2024. This was mainly due to rice prices, which registered a decline of 5.0 percent in August compared to a 10.1 percent decrease in July.
Maize flour prices fell by 24.5 percent in August 2024, compared to a 26.1 percent decrease in July 2024,” the report states.
Kampala High Income Group registered the highest inflation at 4.8 percent for the year ending August 2024, compared to 5.4 percent in July 2024. This was mainly driven by annual ‘Clothing and Footwear’ inflation, which increased to 5.8 percent in August 2024 compared to 4.5 percent in July 2024. Additionally, annual ‘Recreation, Sport, and Culture’ inflation rose 9.1 percent in August 2024 compared to 8.5 percent in July 2024.
The second-highest annual inflation was recorded in Mbarara Centre at 4.0 percent for the year ending August 2024, the same rate as in July 2024. This was primarily driven by annual ‘Transport’ inflation, which increased to 4.1 percent in August 2024 compared to 3.1 percent in July 2024. Additionally, annual ‘Clothing and Footwear’ inflation rose to 5.8 percent in August 2024 compared to 4.5 percent in July 2024.
The lowest annual inflation was recorded in Mbale Centre at 1.4 percent for the year ending August 2024, compared to 1.9 percent in July 2024. This was mainly due to the annual ‘Housing, Water, Electricity, Gas, and Other Fuels’ inflation, which registered 4.5 percent in August 2024 compared to 6.2 percent in July 2024. Additionally, annual ‘Food and Non-Alcoholic Beverages’ inflation decreased to -2.6 percent in August 2024 compared to -2.1 percent in July 2024.
-URN
