Uganda’s inflation rate held steady at 3.8 percent in August 2025, according to the latest figures released by the Uganda Bureau of Statistics (UBOS). This continuity from July signals a relatively stable inflation environment as the country manages economic pressures from various sectors.
Overview of August Inflation
The annual Consumer Price Index (CPI) inflation rate remained unchanged from the previous month, reflecting a balanced mix of rising and falling prices in key categories. A slight increase in transport inflation was offset by stability or price declines in food and energy sectors.
| Inflation Indicator | August 2025 | July 2025 | Change |
|---|---|---|---|
| Annual Inflation Rate (%) | 3.8 | 3.8 | No change |
| Monthly Inflation Rate (%) | -0.1 | 0.1 | Slight drop |
| Core Inflation Rate (%) | 4.1 | 4.2 | Slight drop |
| Transport Inflation (%) | 3.0 | 2.5 | Increased |
| Food Inflation (%) | 4.4 | 4.8 | Decreased |
Key Drivers of Inflation
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Transport Inflation: Rose from 2.5% in July to 3.0% in August, exerting upward pressure on overall inflation. Transport makes up about 10% of the CPI basket.
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Food Prices: Showed a mixed trend with some staples (groundnuts, Nile perch) becoming more expensive but others like sugar declining. Food constitutes 27% of inflation weight.
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Core Inflation: Which excludes volatile food and energy prices, edged down to 4.1% from 4.2%, indicating moderate price pressures in underlying sectors.
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Energy and Utilities: Electricity and liquid fuels prices declined, but costs for charcoal and water charges increased.
Regional Inflation Variations
Inflation varied across Ugandan regions, reflecting localized economic conditions:
| Region | Annual Inflation Rate August 2025 (%) | July 2025 (%) | Notes |
|---|---|---|---|
| Masaka | 5.1 | 5.4 | Highest inflation region |
| Kampala (High-income) | 4.9 | 4.8 | Slight increase |
| Mbale | 0.2 | 0.7 | Lowest inflation region |
Monthly Inflation
On a month-to-month basis, Uganda experienced a slight deflation of -0.1% in August, signifying a marginal drop in price levels compared to July. This contrasted with a 0.1% increase recorded the previous month. The monthly decline was mainly due to lower prices in some consumer items.
Economic Context and Outlook
The steady inflation rate of 3.8% remains below the Bank of Uganda’s medium-term target of 5%, indicating effective monetary policy and relative price stability. The Uganda Shilling has remained stable against the dollar, which supports controlled inflation. However, inflation pressures from transport and selective food items require ongoing monitoring.
Experts project inflation to hover around this range through late 2025, with gradual easing expected into 2026 as global fuel prices stabilize and supply chains adjust.
Conclusion
August 2025’s inflation rate of 3.8% reflects a stable economic environment in Uganda, balancing moderate increases in transport costs with overall food price containment. Regional variations highlight the diverse economic realities across the country, and ongoing policy measures aim to keep inflation within manageable limits to protect household purchasing power and support economic growth.