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Inflation Drops to 7.6 Percent in January :: Uganda Radionetwork
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Inflation Drops to 7.6 Percent in January

Masaka registered the highest inflation of 11.7 percent, mainly driven by inflation for food and non-alcoholic beverages. Jinja had the second highest rate of 9.3 percent, driven by inflation for housing, water, electricity, gas and other fuels while Gulu registered the lowest inflation of 5.3 percent.
Uganda's annual inflation rate dropped to 7.6 percent in January 2016, from 8.4 percent recorded for the year ended December 2015.

Presenting the Consumer Price Index (CPI), that is the basket of goods and services used to compute inflation trends, Uganda Bureau of Statistics' (UBOS) Vincent Musoke Nsubuga attributed the fall in inflation to decreases in food crops inflation and Energy, Fuel and Utilities (EFU) inflation.

The CPI is designed to measure the change in prices over time for a fixed basket of consumption goods and services commonly purchased by households within and economic territory.

Nsubuga, who represented UBOS Executive Director, said annual food crops inflation decreased to 21.3 percent for the year ending January 2016, compared to 16.0 percent recorded for the year ended December 2015.

Some of the food crops factored in are matooke, sweet potatoes and Irish potatoes as well as processed foods.

On the other hand, Energy, Fuel and Utilities-EFU inflation decreased to 6.8 percent for the year ended January 2016 compared to the 7.0 percent recorded in December 2015. The EFU basket includes paraffin, petrol, diesel, gas water, electricity and charcoal.

Explaining the figures, Dr Chris Mukiza, the Director for Macroeconomic Statistics, said the decline in inflation does not mean decrease in prices but rather that prices of goods and services  in January increased but at a much slower or reduced speed.

In this case, while in December 2015 prices increased by 8.4 percent, in January 2016 the price increase was at 7.1 percent, a much slower rate compared to the former.

The figures also show that Masaka registered the highest inflation of 11.7 percent, mainly driven by inflation for food and non-alcoholic beverages. Jinja had the second highest rate of 9.3 percent, driven by inflation for housing, water, electricity, gas and other fuels while Gulu registered the lowest inflation of 5.3 percent.

The January inflation figures were the first following the general re-basing of Uganda Consumer Price Index based on 2009/10 reference period from the 2005/6 reference period.

The re-basing introduced food s like citrus fruits, apples and pumpkins and new products like laptops and mobile phones. It also expanded geographical coverage, for example Fort Portal was brought on board, leaving Mbarara to stand alone.

Other new features of the debased CPI are education, health, entertainment, transport, communication, recreation and culture, restaurants and hotels and other miscellaneous goods and services.

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