EA inflation to slow, trade deficit to widen, says IMF

President Museveni tours the Buseruka hydro-power dam. PHOTO BY STEPHEN WANDERA

By Agencies
 

 

In Summary

East Africa’s economies have instituted tight monetary measures that seek to curb inflation growth.

Inflation in East Africa may slow this year as food prices ease, while rising oil costs will probably boost imports and widen trade deficits, the International Monetary Fund said. The governments in Kenya, Uganda, Tanzania, Rwanda and Burundi must keep spending in check as European donors curb funding to fulfill their budgetary obligations, IMF deputy managing director Naoyuki Shinohara said during a conference in Arusha, Tanzania.

Kenya, Uganda and Rwanda have pushed up interest rates since last year to curb inflation after the worst drought in 60 years fueled food prices.

While the impact of drought has eased this year, the price of Brent crude has surged 16 per cent in London since the beginning of the year, adding to import costs.