Determinants of inflation in Uganda:

Abstract

This study sought to find out the determinants of inflation in Uganda. The determinants considered in the study include; supply shocks, policies and demand shock. The study was conducted under 3 objectives; to examine trend of inflation in Uganda for selected products over the past 5 years, to identify and explain the trend of inflation of selected products over the past 5 years, to examine the policy interventions in managing inflation in Uganda. The study used archival design and employed both quantitative and qualitative, panel data of 5 years from 2008 to 2012 was used. The findings from the research revealed that prices increase among different selected products were high in food prices and low in prices of Transport and communication. Policies like monetary and fiscal were employed to curb inflation. The researcher concludes that policies like restrictive monetary and fiscal policies were able to curb on inflation and recommends recommended that the government should improvement on infrastructures; increase on the number of exports, adapt of policies like privatization, reduce on interest rates on agricultural loans and increasing their loan repayment period.