Bank of Uganda has reported drastic raise in Annual crop inflation in the last three months. Prices of food have risen, growing inflation rate.
Uganda’s rising food prices and the effects of exchange rate depreciation have pushed up the cost of living in the last three month according to Bank of Uganda.
This comes at the time when many part of the country is experiencing drought which is likely to last until the end of this year.
While releasing the monitory policy statement for October 2016, the governor Bank of Uganda Prof Emanuel Tumusiime Mutebire said that in the last month food inflation have jumped from -1.9% to 5.1%.
Mutebile explained that the major cause of this the drought that affected affecting planting season and subsequently harvest has been extremely poor.
He however said that the trend is likely to change if rains start in the near future.
Meanwhile annual headline and core inflation declined to 4.1% and 4.2% in September respectively from 4.8% and 5% in august prompting bank of Uganda to lower central bank rate to 13% from the previous 14%.
According to the Uganda Bureau of Statistics (UBOS), the increase in inflation was largely attributed to the annual food crops inflation that rose by a significant figure.
“Food inflation, which includes food crops and processed foods, rose by 5.9 per cent during the month, driven mostly by the prices of staple food,” Ben Mungyereza, the executive director of UBOS told TheUgandan.
The outlook for the country however remains bleak as several donors have pulled out funding, which will put pressure on the country’s budget. The aftermath of the 2016 Presidential elections has also increased costs of essential commodities such as food, transportation and energy.
Additional reporting by Alice Lubwama/CapitalFM
