The relationship between inflation and the welfare of the people of Uganda

Abstract

This study sought to examine factors the Impact of Inflation on the Welfare of the People in Uganda. The study specifically covered Uganda and made use of a time series data set covering a 33-year period from 1989 till 2022. The main objective of this study was to determine and analyze the overall factors affecting welfare of individuals and households in Uganda while the specific objectives that the study set out to establish were: To determine the impact of the deposit rate on the Consumer Price Index, to determine the impact of import expenditure on the Consumer Price Index, to determine the impact of the exchange rate on the Consumer Price Index, to determine the impact of inflation on the Consumer Price Index, to determine the effect of the unemployment rate on the Consumer Price Index, to determine the effect of final consumption expenditure on the Consumer Price Index, to determine the impact of gross savings on the Consumer Price Index. The study was able to employ qualitative and quantitative models to analyze the data. Data analysis was done using descriptive statistics. The qualitative approach provided means of discerning, examining, comparing and contrasting and interpreting meaningful patterns. It also involved examining the assembled relevant data to determine how the data was collected at hand. While quantitative data analysis helped to analyze and categorize frequencies and percentages. Simple descriptive tabulations were used for quantitative analysis. Secondary data was used and the data was collected from reliable sources. Such sources include World Bank where data on global development indicators was obtained, Uganda Bureau of Statistics (UBOS), central bank reports and other government publications. The study considered a time series data set covering a 33-year period from 1989 to 2022. The data was analyzed under multivariate analysis using regression and the results showed that the exchange rate and the Final consumption expenditure had an effect on the Consumer Price Index (𝑝 = 0.000) and (𝑝 = 0.026) respectively