economy 1 September 2026 Daily Monitor (Uganda)
Kampala's Affluent Households Grapple with Rising Inflation
High-income families in Kampala are experiencing the highest annual inflation rate in Uganda, driven by escalating costs in communication, alcohol, and tobacco, according to the latest CPI data. Source: https://www.monitor.co.ug/uganda/news/national/high-income-families-in-kampala-feel-price-squeeze-5578884
Even those with substantial incomes in Uganda’s capital are feeling the pinch of rising prices. Data from the Uganda Bureau of Statistics (Ubos) reveals that Kampala’s high-income households recorded an annual inflation rate of 4.9% for the year ending August 2026, a slight dip from 5.0% in July.
The surge is largely attributed to significant increases in the cost of information and communication services, which saw inflation jump to 2.5% in August from 0.7% the previous month. Additionally, prices for alcoholic beverages, tobacco, and narcotics contributed to the squeeze, with inflation in this category rising to 2.0% from 0.8%.
Nationally, Uganda’s annual headline inflation edged up to 4.1% in August from 4.0% in July. This rise was fueled by increases in core inflation and food crops. Core inflation climbed to 3.5%, driven by higher prices for rice, dried fish, maize flour, and cassava flour. Food crop inflation also increased to 2.1%.
Other urban centers are also facing inflationary pressures. Jinja Centre registered the second-highest inflation at 4.8%, with food and beverages as primary drivers. Mbale Centre followed with 4.3% inflation. In contrast, Mbarara Centre recorded the lowest inflation at 2.9%, partly due to a slowdown in housing and utility costs.
Despite a slight national increase, the Bank of Uganda remains cautious, citing upside risks to the inflation outlook. These include potential global energy price hikes, geopolitical instability affecting supply chains, and adverse weather conditions impacting food production. The Central Bank Rate has been maintained at 9.75% as a result.