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Uganda annual inflation hits 3-year high

Mon 30 Jun 2008, 9:20 GMT
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KAMPALA (Reuters) - Uganda's annual inflation hit a three-year high of 12.4 percent in June, up from 11.2 percent the previous month, driven mainly by higher fuel and food costs.

It was the highest level in the east African nation since 12.6 percent in April 2005.

"The rise in the inflation rate is attributed to higher price levels for food, fuel, beverages, transport costs and household items," the Bureau of Statistics said on Monday.

East Africa's major economies -- Kenya, Uganda and Tanzania -- have all suffered inflationary pressures this year, both due to global price trends and the impact of a post-election crisis in Kenya that damaged regional trade in January and February.

Kenya's year-on-year inflation hit 31.5 in May.

Uganda's core inflation, which excludes food crop items, rose to 12.0 percent in the year to June from 11.8 in May.

The bureau said heightened regional demand for Uganda's food and manufactured items, mainly from southern Sudan, would add to inflationary pressures.

"Tanzania put a ban on exports of food items. At the same time maize supply has almost dried up in eastern Kenya. Most of these regions, including southern Sudan, are looking at Uganda as a source, which has put pressure on prices," it noted.

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