Inflation rose in Uganda for November, even if only marginally, to 4.9 percent, from 4.5 pct the month before, pushed up by utility prices that went up in the season, the state Uganda Bureau of Statistics (UBOS) said.
Inflation is expected to rise further in December as spenders prepare for Christmas, other analysts said, and current gains would only be firmed around April next year.
The pre-dominantly Christian country also has risks facing it from potential disruption adding to possible imported inflation from Kenya, where riots are expected during planned March statewide elections.
“Those are the two major risks facing Uganda’s outlook at the moment, barring major disruption on the world scene,” a senior economic analyst told Newsgate.
The world’s developed economies are expected to grow by just about 1.7 pct, slower than earlier predictions, stemming from slower than expected recovery by the US economy and a still dim prospect for Europe.
Sub-Saharan African economies are expected to do better, owing to their smaller growth bases, and generally detached nature from the global markets, whose disruption started in 2009.
In Uganda, the economy is seen growing at about five percent in the 2012/13 July-June fiscal year, after major disruptions, including an above 30 pct inflation brought growth down to 3.2 pct last year.
“The main inflation drivers were high price levels for rent, water, electricity, education and medical services,” UBOS said in a statement.
Food inflation was up 7.5 pct for November compared to 4.4 pct previously — the highest single contributor.
“A substantial increase in prices was recorded for matooke (staple green bananas), irish potatoes, pineapples, avocado, mangoes, sweet bananas, cabbage and tomatoes,” the UBOS statement said.
The marginal rise in inflation meant the country’s policy makers would not reduce the indicative Central Bank Rate (CBR) when they meet on Monday, Ugandan analysts said.
The CBR is now 12.5 pct, after being introduced at 13 pct in July 2011, and then rising to top 23 pct in December and January.
Core inflation, from which planners usually base their CBR choice, declined slightly to 3.8 pct from 4.0 pct before, UBOS director for macro-economic statistics, Dr Chris Mukiza said.
Inflation for energy, fuel and utilities went up to 13.8 pct from 12.8 pct in October, the fresh data showed.
Uganda needs to grow its economy by at least seven pct a year for 10 years before it can reach middle income status where each person earns about $1,000 each year. At the moment Uganda’s income per person is around $504, and more than 60 pct of the population lives on less than two dollars a day.
Most are farmers and their produce rarely gets to the market on time, meaning farm-based losses are still a major hindrance to a transformation of the sector, experts at Makerere University, East Africa’s best, said.
Delays in exploitation of an oil find in the country’s west have meant cash from the resource will not be here until around 2016 or even 2017 after a refinery is built to prepare the product for export into the region at first, experts said.
UBOS communications and public relations manager Godfrey Nabongo said the Christmas season could pose stiff risks for a Uganda inflation rise and they would give an estimate ahead of the December 25 holiday.