Uganda’s Annual Inflation Rate Dips Slightly to 3.3% in March 2024, Remains Below Central Bank Target

Uganda’s Annual Inflation Rate Dips Slightly to 3.3% in March 2024, Remains Below Central Bank Target

Uganda’s annual inflation rate for March 2024 has seen a marginal decrease, falling to 3.3% from 3.4% recorded in February 2024.

Despite this decline, the inflation rate remains below the Bank of Uganda’s target of less than 5%, indicating a relatively stable economic environment.

Factors Influencing Inflation

Data analyzed by TechCabal suggests that the decline in inflation is primarily attributed to a steady core inflation rate of 3.4% observed in both February and March 2024.

The main driver of this core inflation is the rise in service prices, particularly in the transportation and financial sectors.

Service Sector Price Surge

The increase in service prices, notably in passenger transport and financial services, has contributed to the overall inflation trend.

Passenger transport costs rose to 2.6% in March 2024 from 1.2% in February 2024, while financial services witnessed a significant jump to 13.4% from 0% in the same period.

Goods Inflation and Price Stability

Inflation for other goods registered a lower rate, reaching 1.6% for the year ending March 2024, down from 1.8% in February 2024.

Stable prices for most goods were observed, although certain items such as dried kapenta, local gin (waragi), and goat meat experienced price increases.

Insights on Energy Inflation

Uganda’s annual energy and fuel inflation slowed to 7.6% in March 2024 compared to 8.0% in February 2024.

This moderation can be attributed to decreased price increases for charcoal, firewood, and petrol, suggesting potential government interventions or market dynamics affecting energy prices.

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