The Bank of Uganda has since warned of a rise in inflation in the country if the global prices continue to raise than currently expected.
Currently, the price of fuel remains high and the price of commodities like soap has risen by 85%. A bar of soap that used to be sold at shs3,500 is now being sold at shs7,000 and a liter of cooking oil is now going at shs10,000.
Dr. Fred Muhumuza, an Economist, says inflation becomes a big concern if it ceases to be a one-off and it becomes a trend. He says there shouldn’t be a cause for panic if the rising prices is a one-off.
“When you get a one-off increase as we have seen, you don’t want to panic just in case it has stopped. It is certainly a concern that a bar of soap that was 4,000 or 3,500 is now 7,000. I will only begin to worry if it moves to 10,000,” Muhumuza said.
Furthermore, he said that if this happens, then it would have become a trend. He also said there isn’t much that can be done if it is a one-off apart from just watching.
He said to take the bar of soap back to shs4,000 one needs to understand the factors that led to the price shooting up in the first place.
“Is government able to manage them? If these are factors beyond government, poor government of Uganda cannot do much,” he said.
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