Money and Markets
Inflation to remain above 5%
Inflation is expected to remain above the 5 percent target in the near term, according the recent Monetary Policy Report (MPR), October 2020, released by the Bank of Uganda.
“Indeed, core inflation is projected to peak at 7.0 percent in the first quarter of 2021, before gradually returning to its medium term target, while headline inflation is estimated to peak at 6.1 percent in the second quarter of 2021,” the MPR reads in part.
However, there are risks to these forecasts including a higher fiscal deficit and a more depreciated exchange rate on account of uncertainty that could lead to a rise in inflation. In addition, further easing of lock down measures could enhance expenditure on items such as school fees.
To read the detailed report, here is the download link.