Updated by Faith Barbara N Ruhinda at 1516 EAT on Wednesday 3 December 2025

Uganda’s inflation story this year is less about soaring prices than about the uneasy stillness settling over the country’s factories and power stations.

After months of global uncertainty, volatile commodity markets and persistent pressure on East African currencies, Uganda’s latest inflation figures reveal a subtler trend — an economy holding steady, but struggling to gain momentum.

New data from the Uganda Bureau of Statistics (Ubos) shows that annual headline inflation for manufacturing and utilities stood at 1.2 percent in the 12 months to October 2025, unchanged from September.

On the surface, such stability might seem reassuring. But the flat reading masks a more complicated picture: falling producer prices, weakening demand and a utilities sector where prices continue to slide, pointing to softening economic activity beneath the headline numbers.

Annual headline inflation tracks how quickly the prices of goods and services rise over a 12-month period. Unlike core inflation, which strips out food and energy, headline inflation captures all price movements — including the most volatile ones.

It offers the clearest snapshot of how costly life has become for consumers. But UBOS’s latest release zeroes in on something more telling for industry: producer prices — the amounts factories and utilities receive for their output.

Falling producer prices typically signal weakening demand, tightening profit margins or mounting pressure on businesses. And that is precisely what the October data points to.

Reporting by The Observer

Annual inflation in Uganda’s manufacturing sector eased to 1.6 per cent in October, down from 1.9 per cent in September, with the most significant changes seen in food-related industries.

Food manufacturing inflation fell to 4.7 per cent, down from 5.3 per cent.

Sugar manufacturing plunged to 10.5 per cent, sharply lower than September’s 22.1 per cent.

Vegetable and animal oils dropped to 3.8 per cent, compared with 6.0 per cent in the previous month.

These declines suggest that some of last year’s price pressures — driven by global supply chain disruptions and rising import costs — may finally be easing. At the same time, they point to weaker demand and slowing momentum in key manufacturing segments.

Utilities: Prices Still Falling

The utilities sector continues to weigh on overall inflation. Annual inflation for utilities stood at –2.4 per cent, improving slightly from –4.7 per cent in September. Negative inflation, or deflation, indicates that prices are falling rather than rising.

Electricity prices remain the main driver. Inflation in electric power generation registered –5.6 per cent, up from –10.0 per cent in September. While the rate of decline is slowing, electricity producers are still receiving significantly less revenue than a year ago.

What’s Behind the Monthly Dip?

Monthly figures show an even more subdued picture. Producer prices fell 0.3 per cent in October, deepening the 0.2 per cent decline in September. UBOS said this indicates that, on average, producers received lower prices than the previous month, continuing a short-term weakening trend.

Most of the decline came from the manufacturing sector, which saw monthly inflation drop 0.3 per cent, compared with 0.1 per cent in September.

The steepest fall occurred in one unexpected category: fish processing. Prices for processed and preserved fish, a major export item, fell 3.3 per cent in October, following a 0.9 per cent drop in September. The decline could have ripple effects for fishing communities along Lake Victoria and exporters who depend heavily on European and Asian markets.

Utilities also contributed to the monthly dip, with prices down 0.6 per cent, largely due to continued decreases in electricity generation costs.

Invest or Donate towards HICGI New Agency Global Media Establishment – Watch video here

Email: editorial@hicginewsagency.com TalkBusiness@hicginewsagency.com WhatsApp +256713137566

Follow us on all social media, type “HICGI News Agency” .