Uganda witnessed a modest increase in its annual inflation rate over the 12 months leading up to January 2024, rising from 2.6% in December 2023 to 2.8%. At the forefront of this uptick was the Annual Core Inflation, which experienced a notable 2.4% surge compared to the previous year.
In particular, Annual Services Inflation played a pivotal role in driving the Annual Core Inflation surge, reaching 3.9% in January 2024 compared to 3.7% in December 2023. Key contributors to this upward trend included a significant spike in Annual Passenger Transport by taxi and hired car inflation, soaring to 5.6% from 2.1% in December 2023, and a substantial 30.7% increase in Annual Church wedding fees.
Energy Fuel and Utilities (EFU) inflation also contributed to the overall inflationary picture, rising to 7.4% in January 2024 from 6.4% in December 2023. This increase was attributed to the surge in petrol prices by 4.4%, a 9.4% rise in firewood prices, and a notable decrease in diesel prices by minus 6.6% in January 2024 compared to minus 9.1% in December 2023.
Annual Food Crops and Related Items Inflation experienced a marginal uptick, reaching 2.6% in January 2024, up from 2.5% in December 2023. This slight increase was primarily driven by price hikes in vegetables, tubers, plantains, cooking bananas, and pulses, with notable variations including a 10.7% rise in green cabbage prices and a 4.0% increase in green pepper prices in January 2024.
According to the Classification of Individual Consumption According to Purpose (COICOP), various divisions contributed to the overall inflation, with ‘Recreation, Sport, and Culture’ inflation rising to 1.7%, ‘Personal Care, Social Protection, and Miscellaneous Goods’ inflation increasing to 6.4%, and ‘Restaurants and Accommodation Services’ inflation reaching 4.9%. Meanwhile, ‘Alcoholic Beverages, Tobacco and Narcotics’ inflation increased at a slower rate, reaching 3.4%.
In the monthly context, Food and Non-Alcoholic Beverages inflation rebounded by 0.2% in January 2024, recovering from a 1.3% drop in December 2023. Other notable monthly increases included Housing, water, electricity, gas, and other fuels (0.5%), Personal care, social protection, and miscellaneous goods (0.9%), and Restaurants and Accommodation Services (0.4%).
In the sectoral analysis, the Health sector experienced a 5.2% inflation rate for the 12 months ending January 2024, driven by a significant 13.7% increase in Annual Inpatient Care Services Inflation. The Transport sector saw an inflation increase to 2.5%, with Annual Operation of Personal Transport Equipment inflation leading the rise at 4.5%, while Passenger Transport Services inflation decreased to 0.5%. Information and Communication witnessed an Annual Inflation of 1.8%, primarily influenced by a 2.6% increase in Information and Communication Services Inflation.
The intricate dynamics of inflation in various divisions underscore the need for a comprehensive understanding to effectively navigate these economic shifts in Uganda.
#CPIJan2024 INFLATION The Annual inflation for the year ending January 2024 increased to 2.8% compared to 2.6% for the year ended December 2023. The annual Core inflation increased to 2.4% from the 2.3% recorded in December 2023.@BOU_Official@GCICUganda@gou_economy@mofpedU pic.twitter.com/oRG9ObvgVa
— UBOS Uganda Bureau of Statistics (@StatisticsUg) January 31, 2024
