[2007-12-03]  Inflation Declines
THE relative decrease in the prices of some food items in Kampala has helped the country to register a lower inflation rate, but on average Ugandans still face high expenditure on goods and services particularly in the rural areas.

Worries over the impact of the end of the main harvest season have been responsible for driving up commodity food prices.


The Consumer Price Index (CPI) figures released by the Uganda Bureau of Statistics (Ubos) show that the annual headline rate for the year ending November dropped to 4.8 per cent from 5.5 per cent, which was registered for the period ended October.

However, the annual core inflation rate, which excludes food crop items, fuel electricity and metered water from the CPI basket, also dropped from 6.4 per cent to 6.2 per cent.

"The reduction in inflation rate was due to lower price levels for food, which dropped during the month of November," said the Senior Statistician at Ubos, Mr Ronald Ssombwe at a news conference on Friday.

Mr Ssombwe said food items have the biggest weight of 27.2 per cent in the CPI basket and reduction in food prices will have a bigger impact on the inflation rate.

"The fall in food prices followed a period of high increases in food supplies from the rural centres to Kampala ahead of the Commonwealth Heads of Government Meeting," he said.

However, in general terms, Mr Ssombwe said, food prices went up in most centres with significant contributions coming from staple foods, fresh fruits and some vegetables such as passion fruits, pineapples, tomatoes onions, cabbages and dry beans. Increases in prices of food items were due to low supply to the market.

On month-to-month basis, food prices increased by 1.8 per cent in November compared to 3.0 per cent in October.

The CPI figures also indicate that during the month, the prices of chicken and salt went up in a number of centres. Kampala and Arua centres registered the highest decrease in food prices during the month.

An increase in prices of petrol and paraffin was observed while a reduction in charcoal was recorded in most centres.

Generally, the CPI presents a mixed up situation on the impact of low inflation during the period.



Source: Copyright © 2007 The Monitor.