Uganda's Economic Overview

Real Sector 

  • Headline inflation continued to slow down to 1.9% for the year ending September 2019 from 2.1% recorded for the year ended August 2019. The decline was majorly on account of a fall in core inflation coupled with a large decline in prices for Food Crops and Related Items. 
  • There was an improvement in the level of economic activity according to the Composite Index of Economic Activity (CIEA) and the Purchasing Managers’ Index (PMI). 
  • Investor’s sentiments about doing business in Uganda remained positive in September 2019 as illustrated by the BTI which remained above the indicative threshold of 50. 

Financial Sector 

  • The Ugandan Shilling traded at an average of UShs 3,675.50 to the US Dollar in September 2019, recording an appreciation of 0.5%, following the sustained increase in supply of foreign currency and particularly US Dollars, to the Interbank Foreign Exchange Market (IFEM). 
  • Lending rates for Shilling denominated credit reduced from 21.4% in July to 20.2% in August 2019. However, lending rates for foreign currency denominated credit remained unchanged at 6.9% in August 2019. 
  • Yields (interest rates) on Treasury-bills reduced for the 91-day T-Bill, 182-day T-Bill and 364-day tenor. 
  • UShs 663.81 billion (at cost) was raised from 3 auctions of Government securities in September. Securities worth UShs 633.63 billion were issued for refinancing of maturing debt whereas, UShs 30.19 billion went towards financing other activities in the Government budget. 
  • The stock of private sector credit increased by 0.9% from UShs. 15,226,26 billion in July to UShs. 15,357.38 billion in August 2019. 

External Sector 

  • Uganda’s merchandise trade deficit narrowed on both the monthly basis and annual basis. The merchandise trade deficit narrowed by 16.8% (US$ 36.6 million) to US$ 181.43 million in August 2019 from US$ 218 million in July 2019. Export earnings grew by 5.9% from US$ 300.63 million in July 2019 to US$ 318.43 million in August 2019, whereas, the value of merchandise imports dropped by 5.12% from US$ 579.54 million in July 2019 to US$ 549.85 million in August 2019. 
  • In the month of August 2019, Uganda posted merchandise trade deficits with the regions of Asia, Rest of Europe, EAC and Others, whereas, trade surpluses were registered for Rest of Africa, Middle East and the European Union. 

Fiscal Sector 

  • Government operations during the month of September 2019 resulted into a Shs 692 billion deficit which was higher than the programme of Shs 623 billion. This performance was on account of short falls in Revenues and Grants which were offset by the under performance in Expenditure and Net lending. 

East Africa Community

  • There was a general decline in Annual Headline Inflation with Uganda, Kenya and Tanzania registering declines. Annual Headline Inflation for Kenya reduced from 5.0% in August to 3.8% in September while Tanzania’s Annual Headline Inflation slightly decreased to 3.4% in September 2019 from 3.6% August 2019. However, Rwanda's annual inflation continued to rise to 4.6% in September from 2.8% recorded in the previous month, its highest level since October 2017. 
  • Contrary to the Ugandan shilling, Kenya’s, Burundi’s and Rwanda’s currencies slightly depreciated against the US Dollar in September 2019 with the Tanzanian shilling remaining unchanged from the month before. 
  • In August 2019, Uganda traded at a deficit with the EAC at US$ 22.7 million compared to a surplus of US$ 61.09 million recorded in August 2018. Over the same period, exports to EAC declined by 28.2% whereas imports increased by 78.5%.

For more details on the status of Uganda's economy, please, visit the official web site of Uganda's Ministry of Finance, Planning and Economic Development.

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