By KT Reporter
The reduced inflation rates for the last twelve months ending March 2025 have been attributed to the declining food prices in the country. According to the Uganda Bureau of Statistics (UBOS) Consumer Price Index (CPI) report, report annual inflation rate dropped to 3.4 percent, down from 3.7 percent recorded in February 2025.
The report indicates that the slowdown in inflation is largely attributed to a decline in food prices, particularly in key agricultural commodities. “A significant factor in the drop in overall inflation was the sharp decline in the inflation rate for food crops and related items, which fell to 3.1 percent in March 2025 from 4.3 percent in February 2025,” part of the report.
It further notes that this was primarily driven by a substantial reduction in the prices of onions, which -28.6 percent in March compared to -14.9 percent in February, fresh cassava -14.5 percent in March compared to -1.4 percent in February, and mangoes -0.3 percent in March compared to 21.2 percent in February. “Additionally, matoke (green bananas), a staple food in Uganda, saw a price decline of -0.5 percent in March after recording an increase of 7.6 percent in February.”
While releasing the report, Samuel Echoku, the UBOS head of the Macroeconomics department, said that the decline in food prices has been attributed to improved agricultural output, supported by favorable weather conditions. “The harvest season in several regions of the country contributed to the increased availability of fresh produce, easing price pressures,” he stated, “initiatives to enhance food production and market stability appear to be yielding results.”
According to the report, the annual core inflation, which excludes food and energy prices, stood at 3.6 percent in March 2025, down from 3.9 percent in February 2025. Within this category, annual services inflation dropped to 4.9 percent from 5.4 percent in February, largely due to a decrease in passenger transport by road, which stood at 1.2% in March compared to -1.0% in February. Similarly, hotel and lodging service charges fell by -3.2% in March, compared to -4.4% in February, indicating a reduction in hospitality sector costs.”
While food and service costs decreased, the energy, fuel, and utilities (EFU) inflation rate slightly increased to 0.3% in March 2025 from 0.2% in February. The report mainly attributes this to the increase in solid fuel prices like charcoal, whose prices rose by 6.4% in March compared to 5.2% in February, and firewood prices holding steady at a 9.6% increase.
However, in the same category, petrol prices showed a modest decline of -0.2% in March compared to a -0.7% drop in February, indicating some stability in fuel markets. Despite minor fluctuations in energy costs, their overall impact on inflation remained subdued compared to food price movements.
According to the Classification of Individual Consumption by Purpose (COICOP), the most significant inflationary change was recorded in the insurance and financial services sector, which registered an annual inflation rate of 13.1% in March, down from 15.8% in February. The financial sector’s inflation decline suggests reduced service fees and a possible stabilization of financial market conditions.
Inflation in the recreation, sports, and culture sector saw a notable drop to 1.6% in March from 3.7% in February. Meanwhile, transport inflation fell to 3.9% from 4.3% in February, reflecting reduced fuel and transport service costs.
Headline inflation rose by 0.2% in March 2025, compared to a 0.6% increase in February. This suggests a deceleration in price increases, which aligns with the overall annual trend. Monthly core inflation increased by 0.1% in March, down from 0.6% in February, largely due to a slowdown in the price growth of services.
However, monthly food crops and related items inflation remained high at 1.1%, driven by rising prices of sweet potatoes 7.5%, green peppers 30.0%, passion fruits 11.2%, and pineapples 12.2%.
Echoku highlighted that this decline in annual inflation is a positive development for consumers, as it suggests a gradual easing of price pressures. “Lowering inflation rates is likely to improve household purchasing power, particularly for essential goods such as food. This trend may be viewed as a sign of economic stability, potentially influencing future monetary policy decisions.”-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
