Inflation for the year ending July 2017 came in at 5.7 per cent, the second successive decline, compared to 6.4 per cent recorded for the year ended June 2017.
The Uganda Bureau of Statistics attributes the drop to a decline in annual food crops inflation to 12.9 per cent from 18.1 per cent in June.
The main cause of the drop in food prices was vegetables inflation which declined to 4.9 per cent versus 9.6 per cent the previous month. This was because of an increase in the supply of vegetables, according to the UBOS principal statistician, Vincent Nsubuga Musoke.
Fruits inflation also declined to 24.2 per cent compared to the 32.4 per cent recorded the previous month, which was also attributed to “increased supply to the market during the month,” particularly of matooke.
Core inflation, which is closely watched by the Bank of Uganda, declined to 4.5 per cent in the year ending June 2017 from the 4.9 per cent recorded in the previous month. The biggest contributor to the fall was other goods inflation which declined to 4.9 per cent from 5.6 per cent in June.
Energy, fuel, and utilities inflation rose to 7.8 per cent in the year from 5.7 per cent in June, mainly as a result of an increase in the annual prices of solid fuels (charcoal and firewood) which rose by 6.7 per cent compared to 2.7 per cent in the previous month.
Inflation in July declined by 0.5 per cent compared to 0.6 per cent in June, mainly due to food crops and related items inflation which declined by 2.9 per cent from a 7.5 per cent decline the previous month. Core inflation in the month fell 0.3 per cent versus a 0.4 per cent rise in June. The only rise in July was recorded for energy, fuel, and utilities inflation at 1.1 per cent.