Inflation drops to 3 percent during October

November 5, 2018 in Business, Markets by Editor

November 5, 2018—Uganda’s Annual Headline Inflation dropped down to three percent during the year ending October 2018 after the spike in September when it reached 3.7 percent.

According to the Uganda Bureau of Statistics (UBOS), the decline in Headline Inflation is largely attributed to the Annual Food Crops and Related Items Inflation for the year ending October 2018, which decelerated further to minus 3.4 percent compared to minus 2.2 percent recorded for the year ended September 2018.

Meanwhile, the Annual Core Inflation also declined to 3.5 percent for the year ending October 2018 compared to the 3.9 percent registered for the year ended September 2018.

This decrease was due to Annual Other Goods Inflation that registered 2.9 percent for the year ending October 2018 compared to 3.4 percent recorded for the year ended September 2018. In particular, Maize Flour Inflation declined

further to minus 41.4 pc for the year ending October 2018 compared to the minus 40 pc recorded in September 2018.

A drop in core inflation is welcome news for those looking at the trend of borrowing rates. Higher inflation in September was seen as one of the reasons Bank of Uganda raised the benchmark Central Borrowing Rate (CBR) to 9 percent from 10 pc at the beginning of October.