What the increase in inflation means as Uganda crosses into FY 2025/2026
Dr. Chris Mukiza , UBOS Executive Director
By Evans Najuna
The Uganda Bureau of Statistics (Ubos) on Monday 30th June 2025 announced that the annual headline inflation for the 12 months to June 2025 had increased to 3.9% from 3.8% as recorded in June as measured by the consumer price index (CPI).
According to Mr Samuel Echoku, the Ubos Head of Macro Statistics, the increase is largely attributed to annual food Crops and related items inflation recorded at 4.7% in the year ending June 2025, compared to 4.3% in May. “This was mainly attributed to a rise in the prices of dry beans (12.1%) compared to 9.2% in May, plantain locally known as Matooke by 37.7% up from 29.8% in May, passion fruit 5.3% up from -2.3% in May and Irish potatoes that recorded a -0,6% compared to -5.5% recorded in May,” a press statement from Ubos reads in part.
Meanwhile the annual core inflation steadied at 4.2% as it was the case in May. The main driver of annual inflation, according to the bureau is the annual services inflation of 4.7% in June as it was the case in May, which was mainly to outpatient care services inflation of 7.9% in June up from 4.5% recorded in May.
Restaurants and accommodation services inflation services inflation also increased from 4.6% in May to 4.7 in June. However, annual other goods inflation reduced from 3.7% compared to 3.8% in May, which was due to the decrease in the price of sugar from 4.0% in May to 3.9% recorded in May.
Additionally, the price of rice increased by 7.6% in the month ended June down from 3.7% recorded in May. The price of maize flour also increased from7.4% in May to 12.6%
The energy sector on the other hand had a slight reduction as the annual energy fuel and utilities (EFU) reduced by -0.2% in June down from -0.9% in May, which according to Ubos was mainly attributed to firewood prices that dropped from 8.4% in May to 7.8% in the month ended June 2025.
The price of kerosene also dropped by -4.1% in June down from -4.0% in May. Kerosene is widely used in the rural areas of the country as a source of energy for lighting and cooking by families, not on the national grid of hydro electricity and solar energy.
Charcoal prices meanwhile had upward spiral from 2.6% in May to 4.6%, with a sack currently being sold at the retail price of about Shs80,000.
Diesel prices also had a drop of -4.7% in June down from -6.0% recorded in May, and Liquefied Propane gas (LPG) prices also had a -4.9% reduction from -6.4% recorded in May.
The construction sector shockingly had a reduction annual inflation due to the decrease in the construction of non-residential buildings from 0.7% in May compared to 1.0% in April. There was also a reduction in the construction of residential buildings down from 1.0% in April t0 0.7% recorded in May.
As the country begins a new financial year with a budget of Shs72.136 trillion, with sights set on transforming every corner of the country into a hub of economic activity, according to Finance Minister Matia Kasaija who hinted on 12th June 2025 at the budget speech that the government will focus on people and wealth creation, consumers need to tighten their belts, keeping in mind that the country is heading in the general elections come early 2026, with expected increased election expenditure which could drive the annual inflation to double digits.
It is only prudent that the public spends on the essentials, and avoid being wasteful according to economic experts who spoke to us.
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