This study investigates the risk of a deflationary spiral in Uganda by analyzing historical trends and forecasting inflation dynamics from 1983 to 2022 using a quantitative approach based on autoregressive integrated moving average (ARIMA) modelling. Time-series data from the World Bank is utilized, with inflation, GDP deflator (annual %) serving as the dependent variable, while autoregressive (AR) and moving average (MA) components are the independent variables. Parameter estimation is conducted using maximum likelihood estimation (MLE), revealing that the AR(1) coefficient (0.7387) is positive and statistically significant, implying that approximately 74% of inflation persistence is influenced by prior values. The estimated ARIMA (1, 1, 1) model is covariance stationary and invertible, confirming its reliability for forecasting future inflationary trends. Projections from the model suggest a severe deflationary spiral, with inflation rates expected to decline sharply from -1.02% in 2023 to approximately -50.54% by 2042. Such trends highlight substantial economic risks, including reduced consumer spending, investment contractions, and rising debt burdens. The study recommends urgent policy interventions, including expansionary fiscal and monetary policies, inflation targeting frameworks, and investment incentives, to mitigate deflation risks and stabilize Uganda’s macroeconomic environment.