| dc.description.abstract | Inflation is the percentage change in the value of the Consumer Price Index (CPI) on a year on year basis. It’s measured by the consumer price index and reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The aim of this study was to assess the effect of inflation on people’s standards of living in Kikoni. A total of 87 participants were included in this study and data was collected using Kobo collect tool and analysed using STATA.
The study revealed that increase in public spending has resulted into the increasing commodity prices in Kikoni. The study findings also indicated that, non-economic factors such as natural calamities like COVID-19 pandemic, floods, locusts etc. resulted to increase in the commodity prices. The study also asserted that as a result of increased fuel prices, most people have been left with less money for spending on other goods and services, since a larger proportion is spent on fuel thus lowering their standards of living.
The study therefore recommended that more effort should be made to ensure that inflation levels are kept low; not only to maintain a decent standard of living but also to avoid a huge negative impact on standard of living since sensitivity of standard of living to inflation increases as inflation gets higher. Also, the study recommends the government to adopt a blend of fiscal and monetary policies to curb the high inflation and elevate the standard of living of people in Uganda. The reason for this is based on the fact that the inflation challenge faced by Ugandans cannot be combatted by strictly adopting fiscal policies or otherwise.
The study also recommends that further studies on inflation should be conducted so as to determine whether the impact of inflation on living standards of Ugandans is exactly as established, or the difference if any.
Finally, it is recommended that attention should be paid to other economic indicators that could also be an indication of the standard of living in the economy such as unemployment and poverty. Policy makers tend to make a big deal of inflation as compared to these other indicators. However, it is clear that inflation accounts for only some of the changes in standard of living. These other indicators, which have the tendency to impact or reflect standard of living, should thus receive public attention also. | en_US |
