Uganda’s past inflation since the 1980’s can be grouped into four main episodes; a high inflation

period in the 1980s – early 1990s, more volatile moderate inflation episode from 1995-2007,
very high inflation from 2008-2012 and a relatively stable period from 2013-2020.

Uganda annually Average Inflation Rate - Historical Data

Year Inflation Rate (%) Annual Change Status
2020 3.79% 0.93% Increase
2019 2.87% 0.25% Increase
2018 2.62% -3.02% Decrease
2017 5.64% 0.20% Increase
2016 5.45% 0.04% Increase
2015 5.41% 2.34% Increase
2014 3.07% -1.83% Decrease
2013 4.90% -7.78% Decrease
2012 12.68% -2.45% Decrease
2011 15.13% 11.15% Increase
2010 3.98% -9.04% Decrease
2009 13.02% 0.97% Increase
2008 12.05% 5.91% Increase
2007 6.14% -1.17% Decrease
2006 7.31% -1.14% Decrease
2005 8.45% 4.73% Increase
2004 3.72% -4.96% Decrease
2003 8.68% 8.97% Increase
2002 -0.29% -2.15% Decrease
2001 1.87% -1.53% Decrease
2000 3.39% -2.39% Decrease
1999 5.78% 5.71% Increase
1998 0.07% -8.10% Decrease
1997 8.17% 0.98% Increase
1996 7.19% 0.64% Increase
 1995 6.55% -3.49% Decrease
1994 10.04% -3.49% Decrease

The line graph show the trend of inflation rate from 1994-2000

Inflation Rate (%)

16.00%

14.00%

12.00%

10.00%
Inflation Rate (%)
8.00%

6.00%

4.00%

2.00%

0.00%
20 18 16 14 12 10 08 06 04 02 00 98 96 94
-2.00%20 20 20 20 20 20 20 20 20 20 20 19 19 19

As new government got into power in 1987 and began an economic recovery program that
resulted into a reduction in the excess money supply. Macro-economic imbalances were the
major drivers of the inflation in the 1990’s. This inflation period was characterized by shortages
of key consumer goods that resulted into black market sales of goods with government controlled
prices.

From 1995 to date, Inflation rates in Uganda are greatly influenced by the political environment.
They have been observed to increase every after five years particularly towards presidential
campaigns/elections. In the year 2005 before the 2006 general elections, the inflation rate
between March and July was 10.0%-10.6%, this was dealt with well by the Bank of Uganda that
made sure the inflation rate dropped back to a single digit during and shortly after the elections.
Bank of Uganda records also show that inflation was in the range of 10.9% -11.2% for the
months from May, 2008 to December, 2009.
Despite the rate dropping to 0.2% in the October of 2010 right before the elections, the rates
soared again right after the elections on food and fuel prices in March 2011 during which the
inflation rate was recorded at 11.2%, this inflation rate never declined but even rose to higher
figures for example 30.5%, 29.0% and 27.0% in the months of October, November and
December, respectively. The inflation rates published by Central Bank of Uganda indicate that
from April, 2010 to April, 2011 the inflation rate was a single digit between 5.7%-9.6%.

Economic activity stalled during the latter part of FY20 due to a domestic lockdown for over
four months, border closures for all but essential cargo, and the spillover effects of disruptions to
global demand and supply chains. This resulted in a sharp contraction in public investment and
deceleration in private consumption, hitting the industrial and service sectors hard, particularly
the informal service sector. On a calendar year basis, real GDP growth is expected to contract by
up to 1% in 2020, compared to 7.5% growth in 2019, and, as a result, real per capita GDP growth
is expected to contract by about 4.5%. Even if GDP growth rebounds strongly by 2022, the level
of per capita GDP is likely to remain well below its pre-COVID trajectory. The medium-term
outlook for Uganda has worsened considerably due to COVID-19 tilting risks heavily to the
downside. If the COVID-19 impact lasts longer globally, or the virus spreads more widely in
Uganda, this could derail the recovery in Uganda’s exports; adversely impact a rebound in
foreign direct investment (FDI), tourism and remittances; and further depress productivity and
the domestic economic recovery. That could lead to more severe social and economic impacts
and amplify external and fiscal imbalances hence higher inflation rates.

The higher oil prices are affecting Uganda’s trade balance and real growth outcomes, they also
increase risk to investment plans in the Ugandan oil sector, which was expected to start
producing and exporting by 2024/25. Furthermore, heightened uncertainty in the post-2021
election period, shocks could further exacerbate the risks for higher inflation rates.