High transport fares force rise in inflation

The cost of transport across Uganda has doubled thus pushing up inflation. PHOTO | EDGAR R. BATTE 

By MARTIN LUTHER OKETCH

The high cost of transport has significantly driven up headline inflation for the
period ended June, according to Uganda Bureau of Statistics (UBOS).

The cost, which almost doubled at the start of this month, has spiked inflation increasing to 4.1 per cent for the year ended June compared to 2.8 per cent in May.
Transport costs have a significant impact on the economy given that they feed into all structures of economic activities both within and beyond Uganda.

During the period to June, UBOS said annual core inflation rose to 4.9 per cent from 3.2 per cent in May.

While releasing results for the Consumer Price Index, which measure price movements within a particular period, the Ms Aliziki Kaudha Lubega, the UBOS director of macroeconomic, said the increase in core inflation was mainly driven by annual services inflation recorded at 6.5 per cent in June compared to 1.5 per cent in May.

“In particular, transport services inflation increased to 34.2 per cent in June from -0.3 per cent in May,” he said.
However, food crops related inflation has continued declining due to low prices that have been sustained for months by good harvest and reduced outflow of food items out of the country.

Ms Aliziki said food crops and related items inflation stood at -4.8 per cent in June compared to -4.4 per cent in May.
The decrease was mainly supported by fruits inflation which stood at -17.1 per cent compared to -16.3 per cent in May.
In particular, she said, inflation for bananas decelerated -32 per cent for the year ended June compared to - 29.0 per cent in May.
Annual Energy Fuel and Utilities (EFU) inflation declined to 8.3 per cent from 8.6 per cent in the period under review. The decrease was mainly due to solid fuels inflation, which reduced to 26.4 per cent compared to 27.1 per cent in May.
Annual inflation for charcoal declined to 26.4 per cent for the year ended June compared to 28.5 per cent in May.

Annual inflation for petrol fell to -7.4 per cent compared to 7.8 per cent in May.

Inflation has for at least three years remained under the 5 per cent Central Bank target due to stability in much of the economic sectors key among them money markets and the petroleum and related supplies sector.