KAMPALA: Uganda’s inflation is expected to reach 10 percent through the February election period, but rate hikes last year mean it will ease to a central bank target around 5 percent in the second half of 2016, the International Monetary Fund said on Friday.
Rising government spending before the Feb. 18 presidential and parliamentary elections, combined with a global flight by international investors to safer assets outside emerging markets, sent the shilling lower and inflation up.
The shilling lost 20 percent of its value last year and reached a record low in September, while inflation climbed to 9.3 percent in December.
Ana Lucía Coronel, the senior IMF resident representative to Uganda, told Reuters in an interview that inflation had nevertheless been brought under control by the central bank, which raised the benchmark rate 6 percentage points last year to 17 percent.
