The drop in the food prices in the month of June could be an indicator that the country is beginning to recover from the recent drought that saw it being hit by hunger. “The average annual inflation for 16/17 was 5.7% compared to 6.6% in 2015/16. This is a decline by a 0.09%, so the message is that the rate at which prices were increasing during the Financial Year ending today was lower than how they were increasing last Financial Year by 0.07%.” Said, Chris Mukiza, Director Macroeconomics Statistics UBOS.

However, monthly core inflation that measured the price change of goods and services increased thus a general dropping demand. “Foreign exchange has stabilized for like one month or two. So we are not even getting imported inflations, things have remained stable. But basically, on services, average demand is at good so that there is no question. And I think that’s why the Central Bank recently reduced the QPR to the lowest ever to 10%. So in the Financial Year 2016/2017, we registered a lower inflation on average compared to the previous year. But it was higher than 2014/2013 and 13/14, so last year that Financial Year registered higher inflation rate.” Similarly, a Statistics Agency indicated that the annual core inflation declined 4.9% in June versus 5.1% in May.