KAMPALA, Uganda (eTN) – New figures have revealed that the annual headline inflation figure for Uganda has now gone beyond 11 percent already, compared with government and central bank targets of only 5 to 6 percent for the year 2008.
While in Kenya this figure is already about three times as much, probably also influenced by the months of post election violence, the trend nevertheless spells trouble for the East African Community countries.
There is now also a growing fear that tourism in the region may not meet its targets, as flights from Europe and America – some of the core markets for the Eastern African states – are subject to constantly rising air fares and fuel supplement charges and of course these markets’ own uncertainties over their economic future in coming months and years.
Some of these markets have already experience a sharp reduction in the levels of early holiday bookings compared to last year in the face of runaway food and fuel bills, prompting greater caution how households distribute discretionary spending like paying for holidays.
The government in Uganda has already conceded that they are unlikely to meet their own inflationary targets and the economy is subsequently looking again at a range of impacts, like rising interest rates, wobbles in the foreign exchange market and unclear economic trends, for which predictions are more and more difficult.