Inflation across the East African Community fell sharply in June, with annual headline inflation dropping to 7.8% from 22.7% a year earlier. This decline was recorded despite rising core and food inflation, which pointed to persistent underlying price pressures. According to the EAC Quarterly Statistics Bulletin, regional annual headline inflation declined from 11.1% in April to 10.7% in May before falling to 7.8% in June.
On a month-on-month basis, the regional price index fell by 0.8% in June, following a 1.2% increase in May. The decline in headline inflation was accompanied by a rise in core inflation, which increased from 6.2% in April to 6.4% in May and 7.0% in June. This rise indicated that despite the sharp decline in headline inflation, underlying price pressures persisted.
Food inflation also increased, reaching 10.1% in June from 9.5% in May, although it remained considerably below the 37.5% recorded in June 2025. This meant food prices continued to rise compared with a year earlier, but at a considerably slower rate. The increase in food inflation contributed to the persistent underlying price pressures in the region.
Inflation in energy, fuel, and utilities eased to 11.1% in June from 14.2% in May. However, it remained above the 6.3% recorded in June 2025, indicating stronger annual price pressures in the category than a year earlier. This development suggested that the region still faced challenges in controlling price increases in essential services.
The EAC partner states recorded varying inflation rates in June. Tanzania recorded annual headline inflation of 4.0%, below the regional rate of 7.8%. Uganda recorded the lowest rate among the partner states covered by the EAC-HCPI at 3.7%, while Rwanda and South Sudan recorded the highest at 13.0% each. Burundi recorded 8.0% and Kenya 6.5%.
South Sudan's inflation rate fell from 23.1% in May, while Rwanda's remained unchanged at 13.0%. For the 2025/26 fiscal year, regional annual average headline inflation declined to 14.2% from 23.0% in 2024/25. The Bulletin attributed the decline to lower inflation in South Sudan and Burundi, where annual average rates fell from 179.4 to 43.2% and from 33.3 to 18.0%, respectively.
The easing of inflation was accompanied by divergent movements in interest rates across the region during the second quarter. The varying inflation rates and interest rate movements across the EAC partner states highlighted the complexities of economic management in the region. Policymakers would need to consider these factors when making decisions to maintain economic stability.
Key points
- East African Community inflation drops to 7.8% in June
- Core and food inflation rise despite decline in headline inflation
- Inflation rates vary across EAC partner states, with Uganda recording the lowest rate at 3.7% and Rwanda and South Sudan at 13.0% each.
