Uganda’s annual headline inflation rose to 3.8% for the year ending May 2025, up from 3.6% the previous month, according to the latest figures released by the Uganda Bureau of Statistics (UBOS).
The increase was largely attributed to rising prices in the services and other goods categories, reflecting shifts in both consumer demand and supply chain dynamics.
Core inflation, which excludes volatile items such as food and energy, stood at 4.2%—a slight uptick that signals persistent pricing pressure in the broader economy.
Food prices played a significant role in the inflationary trend, particularly for key staples like matooke. Analysts attribute the changes in matooke prices to seasonal variations.
A recent dry spell led to reduced availability as much of the previous harvest had been sold or dried. Although the current rainy season has spurred fresh planting, the new crops are not yet ready for market, leading to a temporary supply shortfall.
Meat prices also saw an upward push due to supply constraints. During the dry season, limited water and grazing resources prompted livestock farmers to sell off large numbers of animals.
With improved pasture conditions following recent rains, farmers are now holding onto their livestock, reducing market supply. Furthermore, some animals have been exported, further tightening local availability.
Energy costs also exerted inflationary pressure, with notable increases in petrol and diesel prices. While prices for firewood rose, there was a contrasting decline in the cost of charcoal, pointing to varied trends within the Energy, Fuel, and Utilities (EFU) category.
On a monthly basis, inflation remained steady at 0.5% for May 2025, matching April’s figure. Food items such as dry beans, sweet potatoes, cabbages, and matooke registered price increases, contributing to the month-on-month rise.
Geographically, Masaka recorded the highest annual inflation at 5.3%, followed by Kampala High Income areas at 4.8%. Mbale registered the lowest inflation at just 0.5%, reflecting significant regional disparities in price movements.
Despite moderate overall inflation, the central bank is expected to closely monitor fuel and food prices given their potential to spill over into broader economic indicators.
With agricultural production expected to increase in the coming months, inflationary pressures could ease if supply rebounds as projected.