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Uganda’s inflation rate to drop by 8% in 2023

It is anticipated that Uganda’s economy will benefit from an 8% decrease in inflation.

The nation’s central bank made this prediction. According to the Bank of Uganda, domestic inflation is anticipated to fall to between 6% and 8% before stabilizing at 5% in 2023.

This prediction deviates from past forecasts that suggested Uganda’s inflation rate will decrease by 10% by 2023.

Fortunately, Uganda’s current inflation rate has been on the down, dropping from 10.7% in October to 10.6% in November.

“The revision in the forecast is due to dissipating impact of earlier increases in global commodity prices, subdued domestic demand, effects of the current monetary policy stance, expected decrease in global inflation, and lower exchange rate depreciation,” said Dr. Michael Atingi-Ego, governor of Uganda’s Central Bank.

The country’s currency will continue to rise in 2023 along with a declining inflation rate, the Bank predicts, building on its current 1.6% appreciation.

The Ugandan dollar has been stable over the past few months while most other African currencies have been moving.

The country’s monetary measures, which have steadied its currency, are, according to the bank’s governor, heavily reliant on foreign economic developments, particularly the predicted slowdown in the advanced economies’ rate of monetary tightening.

“Given the situation, the MPC chose to keep the CBR at 10%. This will give us some time to evaluate how the economic outlook is changing,” he said.

“Any changes to the stance of monetary policy will continue to be made in a cautious and gradual way based on the forthcoming data, ensuring that monetary policy remains supportive of sustainable economic growth in a setting of price stability.” Governor furthermore.

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