Economy promising but inflation stressing consumers

This month, the central bank highlights show that economic growth expected to pick up close to 5.3 percent with the Central Bank Rate maintained at 9.5 percent.

KAMPALA | As Inflation is kept below the central bank target of 5 percent, rising costs of goods continue to take shape and impact on household budget and consumer behaviour.

Economists say the inelastic demand is likely to be affected with consumers receiving shocks at a personal, level forcing an area adjustment in consumption.

According to the Uganda Bureau of Statistics, the core inflation rate was recorded at 2.4 percent reflecting a slight increase from 2.3 percent that was reported in December last year.

However, the inflation projected to remain below the 5 percent target with commodity goods like rice and matooke.

Inflation has put consumers in an anxious mood, even as the economic data is promising. However, the rising prices continue to affect buying behaviour and how businesses respond.

This month, the central bank highlights show that economic growth expected to pick up close to 5.3 percent with the Central Bank Rate maintained at 9.5 percent.

However, inflationary pressures remain subdued, reflecting the continued fading effects of supply-side shocks, declining global inflation.

Nevertheless, Senior Economist David Walakira says the growth outlook continues to remain subject to downside risks stemming from global uncertainties and happenings attracting the aid flow into the country.

“There are products that are essential for example the inelastic demand, even if there are changes that are happening, goods like salt, sugar, their demand will not be affected,” Walakira said.

Despite the current tough economic times and the high prices of commodities in retail.

The Current level of the annual headline and annual core inflation are below the bank of Uganda Policy Target of Controlling Uganda’s Inflation at a figure of 5 percent.