Kampala's High-Income Earners Face Steepest Inflation at 4.9% in August

High-income households in Kampala are bearing the brunt of rising prices, recording an annual inflation rate of 4.9% for the year ending August 2026. This figure, slightly down from 5.0% in July, was significantly influenced by escalating costs in information and communication services, which saw inflation jump to 2.5% from 0.7%, and a rise in alcoholic beverages, tobacco, and narcotics prices, with inflation climbing to 2.0% from 0.8%.

Other urban centers also reported substantial inflation. Jinja Centre followed with the second-highest rate at 4.8%, largely due to increases in food and non-alcoholic beverages, alongside a sharp rise in information and communication charges. Mbale Centre registered the third-highest inflation at 4.3%, while Kampala’s middle-income group experienced 4.1% inflation.

Nationally, Uganda’s headline inflation edged up to 4.1% in August. This increase was fueled by core inflation, which rose to 3.5%, and food crop inflation reaching 2.1%, driven by higher prices for staples like rice, dried fish, maize flour, and potatoes.

Despite some moderation in sectors like international airfares and hairdressing services, persistent high prices for fuel and energy remain a key concern. Petrol inflation stood at 28.5% and kerosene at 31.1%. The Bank of Uganda maintains a cautious monetary policy stance, keeping the Central Bank Rate at 9.75%, citing risks from global energy prices, potential supply chain disruptions, and adverse weather conditions impacting food security. Potential upside risks to inflation include global economic shocks and a stronger-than-expected domestic economic output.

Source: Daily Monitor (Uganda)