KAMPALA – Uganda’s inflation rose to 5.7 percent year-on-year in December from 4.6 percent last month, after a drought fueled a surge in food prices, the statistics office said on Friday.
Annual core inflation also jumped to 5.9 percent from 5.2 percent in November. The central bank monitors core inflation for monetary policy purposes and it strips out food, fuel, metered water and electricity prices.
The Uganda Bureau of Statistics (UBOS) attributed the jump in core inflation to an uptick in prices of some services like transportation and hospitality.
On a monthly basis, prices increased by 1.2 percent this month, compared to a rise of 0.7 percent in November.
The index for food and non-alcoholic beverages category, which has the heaviest weight in the inflation basket, rose by 7.3 percent on an annualized basis in December, up from 5.2 percent last month, UBOS said.
David Bagambe, a trader at Diamond Trust Bank, said the price pressures reflected the impact of a prolonged drought that cut crop harvest in most areas, triggering food shortages in large parts of the country.
“The drought was hard and the tick up in prices was largely expected,” he said.
The central bank has a target of core inflation staying at 5 percent in the medium term.