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

This forecast was estimated by the country’s central bank. The Bank of Uganda noted that inflation within its borders is likely to drop to between 6% and 8%, before reaching an equilibrium of 5% in 2023.

This forecast differs from earlier predictions which estimated that Uganda’s inflation rate in 2023 would drop by 10%.

The current inflation rate in Uganda has fortunately been on a downward trend, falling from 10.7% in October to 10.6% in November.

The governor of Uganda’s Central Bank Dr Michael Atingi-Ego, stated: “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.”

According to the Bank the country’s currency is also going to build upon its current 1.6% appreciation, and strengthen even further in 2023, alongside a deflating inflation rate.

For the past few months the Ugandan currency has remained stable where most other African currencies are fluctuating.

However, the governor of the bank admitted that the country’s monetary policies, which has stabilized its currency, is very dependent on external economic events, particularly the pace of monetary tightening in the advanced economies, which is expected to slow down.

“In the circumstances, the MPC decided to maintain the CBR at 10 percent. This will allow time to assess the evolving economic outlook,” he said.

“Any adjustments to the monetary policy stance will continue to be determined by the coming data and in a measured and gradual manner, ensuring that monetary policy remains supportive of sustainable economic growth in an environment of price stability.” The governor added.