Uganda’s annual headline inflation rose to 3.7 percent in June 2026, up from 3.2 percent recorded in May, according to the latest Consumer Price Index (CPI) report released by the Uganda Bureau of Statistics (UBOS).
The increase marks the second consecutive monthly rise in inflation, with the cost of petroleum products emerging as the biggest driver of price increases across the economy.
Rising fuel prices have pushed up transport costs and increased operating expenses for businesses, which are gradually passing these costs on to consumers.
Despite the rise, Uganda’s inflation remains below the Bank of Uganda’s medium-term target of 5 percent, indicating that overall price pressures are still relatively contained.
According to UBOS, core inflation, which excludes volatile food crop prices and energy products, increased to 3.4 percent in June from 3.0 percent in May.
Inflation for Energy, Fuel and Utilities (EFU) accelerated to 11.9 percent, up from 9.1 percent the previous month, reflecting sharp increases in fuel prices.
The statistics agency said annual liquid energy fuels inflation climbed to 26.2 percent in June from 16.6 percent in May.
Petrol prices increased by 26.3 percent over the year, while diesel recorded the highest increase at 37.3 percent.
Kerosene prices rose by 31.7 percent, while cooking gas prices increased by 5.4 percent.
The increase in fuel prices also translated into higher transport costs, and will only rise higher after the Government imposed a new tax levy in the new financial year.
Education costs also registered notable increases, with annual inflation for education services rising to 5.7 percent, compared to 4.1 percent in May, reflecting higher school-related expenses.
Food prices, however, remained relatively stable, helping to cushion households from steeper increases in the overall cost of living.
Annual inflation for food crops and related items remained unchanged at 0.0 percent, compared to 0.2 percent in May.
UBOS attributed this to lower prices for several staple foods, including bananas, beans and onions.
By expenditure category, transport recorded one of the fastest increases in inflation, rising to 8.8 percent from 6.7 percent in May.
Inflation also increased in food and non-alcoholic beverages, housing, water, electricity and gas, furnishings and household equipment, as well as restaurants and accommodation services.
While speaking to this publication, Sarah Ssewanyana, the Executive Director of the Economic Policy Research Centre (EPRC), said the latest inflation figures highlight the continued impact of rising fuel prices on Uganda’s economy.
“Fuel is a critical input across all sectors of the economy. Once fuel prices increase, transport becomes more expensive, businesses incur higher production and distribution costs, and those costs are eventually reflected in the prices paid by consumers,” she said.
Ssewanyana noted that although inflation has increased, the current level remains within the Bank of Uganda’s target range, suggesting that the country’s macroeconomic fundamentals remain stable.
She said the stability of food prices has played an important role in preventing inflation from rising further.
“Had food prices risen sharply as well, the inflation rate would have been considerably higher,” she explained.
Going forward, she urged government to continue investing in transport infrastructure, strengthen agricultural productivity and improve supply chains to reduce the economy’s vulnerability to imported inflation.
