Bank of Uganda releases December economic report indicating signs inflation losing momentum
The Central Bank confirmed this in its State of the Economy Report of December 2022 which assess Uganda's recent macroeconomic developments and the associated monetary policy decisions.
Bank of Uganda has confirmed that there are clear signs of inflation losing momentum and peaking, despite it remaining persistently high.
The Central Bank confirmed this in its State of the Economy Report of December 2022 which assess Uganda’s recent macroeconomic developments and the associated monetary policy decisions.
According to the report, the base effects associated with high prices of imported commodities are diminishing unless renewed by the escalation of the geopolitical tensions.
In addition, supply chain disruptions have been easing over time.
“The main driver of inflation remains the lagged impact of the drought which is putting upward pressure on food prices is temporary and would dissipate soon with onboarding of current season’s harvests. Indeed, annual headline and core inflation respectively edged down to 10.6 percent and 8.8 percent in November 2022 from 10.7 percent and 8.9 percent in October 2022 driven down by the drop of services inflation and a continued fall of inflation for the Electricity Fuel and Utilities (EFU) category of goods,” the report reads.
The report further noted that the Electricity Fuel and Utilities (EFU) inflation has continued to fall for the third straight month in a row after peaking at 19.6 percent in August 2022.
EFU inflation later stood at 12.2 percent in November 2022, a continued decline from 15.2 percent in October 2022 as year-on-year growth, of liquid fuel prices have significantly dropped from the peak of 54.9 percent in August to now 32.7 percent in November 2022.
On the other hand, the other goods inflation marginally edged up to 12.8 percent in November 2022 from 12.7 percent in October 2022 reflecting the still high prices of food commodities such as maize flour, sugar, and rice.
Bank of Uganda further explained that food crops and related items inflation remains high and have accelerated to 27.8 percent in November 2022 from 25.6 percent in October due the effects of the dry spell which has kept the prices of matooke, irish potatoes, cassava and other fresh food stuffs elevated.
