Uganda inflation projected to hit 8% mark, central bank warns

KAMPALA — Uganda’s inflation is projected to remain above the central bank’s medium-term target of 5 percent over the next 12 months, with headline inflation expected to average between 7.5 and 8 percent, the Bank of Uganda said Thursday.

In its November 2026 Monetary Policy Statement published in local newspapers, the central bank said core inflation was also projected to average between 6.0 and 6.5 percent, reflecting mounting domestic and external cost pressures.

The outlook comes as annual headline inflation rose to 5.8 percent in October, up from 4.6 percent in September, while core inflation increased to 4.4 percent from 3.7 percent over the same period.

The bank attributed the rising inflation to higher global oil prices linked to geopolitical tensions in the Middle East, depreciation of the Ugandan shilling and unfavorable weather conditions.

These factors have pushed up fuel, transport, production and import costs, as well as food prices, gradually increasing the cost of goods and services consumed by households and businesses.

The central bank warned that inflation could rise further if the shilling depreciates, international oil and food prices remain elevated, or adverse weather conditions constrain domestic food production.

However, declining global oil prices, improved weather conditions and increased agricultural production could ease inflationary pressures.

“Overall, the risks to the inflation outlook remain tilted towards higher inflation,” the bank said, adding that it would continue monitoring developments and take appropriate action to ensure inflation returns towards its medium-term target. Enditem