Inflation rises to 3.9 per cent


Annual core inflation rose to 3.9 per cent in September down from 3.4 per cent in August due to an increase in international prices, depreciation of the shilling against the dollar and some limited element of imported inflation.
The movement, which represents a 0.4 per cent increase, means that consumers will spend relatively more on similar goods compared to August.

Core inflation excludes volatile items such as fuel, energy and metered water.

While releasing Consumer Price Index data at the weekend, Mr Vicente Nsbuga Musoke, the Uganda Bureau of Statistics principle statistician, said the increase was due to inflation in processed foods, which was registered at 3.4 per cent for the year ended September compared to 2.3 per in the same period last month.

“In particular, clothing and footwear inflation rose to 7.2 per cent. However, services inflation declined to 4.5 per cent in September compared to 5.3 per cent August,” he said.

Prices of clothes and footwear, he said, increased due to depreciation of the shilling against the dollar.

The shilling has in the last three weeks experienced excessive pressure losing by about Shs68 against the dollar. The unit on Friday closed at Shs3,818 compared to Shs3,750 at the close of August.

However, the 3.9 per cent inflation is still below the Central Bank’s target of 5 per cent.

Bank of Uganda on Wednesday is expected to announce the Central Bank Rate, a key tool that is used to control inflationary pressures.

Headline inflation declined to 3.7 per cent in September up from 3.8 per cent in August.
This was because of lower food crop prices registered in the period.

Food crops and related items inflation decelerated to -2.2 per cent in August compared to -1.2 in August.

However, prices of imported fuels such petrol and diesel increased due to an increase in international prices and depreciation of the shilling.

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