Mountains in Uganda

Uganda Economic Forecast

Uganda Economic Outlook

Following a projected year-on-year GDP growth pickup in Q2, available data suggests the economy could be gaining further traction in Q3; in July, activity expanded 6.9% year on year, the strongest increase since June 2021. Additionally, underlying momentum remained robust, as activity rose at June’s 0.4% month on month in July. Inflation receded further in July and August—when the Bank of Uganda unexpectedly lowered its policy rate by 50 basis points—the first cut since June 2021. These developments will have supported consumers’ budgets and private spending in turn. Less positively, the private-sector PMI showed business conditions improved at a softer pace in July–August than in Q2. In other news, on 8 September, Fitch Ratings affirmed the country’s ‘B’ rating with a negative outlook, citing challenges to securing external financing due to human rights concerns.

Uganda Inflation

Inflation receded to an 18-month low of 3.5% in August (July: 3.9%) on softer price increases for food and a steeper fall in transport prices. This year, inflation will decelerate from 2022 but will remain above the Bank of Uganda’s 5.0% target on strong activity, lower interest rates and a weaker shilling. Stronger-than-expected currency depreciation is an upside risk.

This chart displays Economic Growth (GDP, annual variation in %) for Uganda from 2013 to 2022.

Uganda Economic Data

2018 2019 2020 2021 2022
Population (million) 38.8 39.8 41.2 42.5 43.7
GDP (USD bn) 34.0 37.7 38.0 42.8 47.4
GDP per capita (USD) 877 947 922 1,008 1,085
GDP (UGX bn) 126,793 139,939 141,227 153,590 174,888
Economic Growth (Nominal GDP, ann. var. %) 11.0 10.4 0.9 8.8 13.9
Economic Growth (GDP, ann. var. %) 5.6 7.6 -1.2 5.6 5.8
Domestic Demand (ann. var. %) 7.2 8.2 0.7 7.2 -
Private Consumption (ann. var. %) 6.9 7.9 -0.7 7.6 -
Government Consumption (ann. var. %) 3.2 13.7 21.7 -0.4 -
Fixed Investment (ann. var. %) 9.3 7.3 -2.4 9.0 -
Exports (G&S, ann. var. %) 0.7 -14.1 -12.3 21.2 -
Imports (G&S, ann. var. %) 8.7 -9.8 22.4 12.1 -
Industry (ann. var. %) 4.8 9.0 3.2 3.5 5.1
Fiscal Balance (% of GDP) -3.0 -4.8 -7.5 -7.5 -5.8
Public Debt (% of GDP) 34.9 37.6 46.3 50.6 50.8
Money (ann. var. of M2 %) 7.0 16.4 18.6 5.8 8.3
Inflation (CPI, ann. var. %, eop) 2.3 2.4 2.5 2.9 10.2
Inflation (CPI, ann. var. %, aop) 2.1 2.1 2.8 2.2 7.2
Central Bank Rate (%, eop) 10.00 9.00 7.00 6.50 10.00
Exchange Rate (UGX per USD, eop) 3,715 3,685 3,650 3,544 3,714
Exchange Rate (UGX per USD, aop) 3,726 3,712 3,718 3,588 3,687
Current Account Balance (USD bn) -2.1 -2.5 -3.6 -3.6 -4.0
Current Account Balance (% of GDP) -6.1 -6.7 -9.3 -8.3 -8.4
Merchandise Trade Balance (USD bn) -2.5 -2.8 -2.6 -3.0 -3.7
Merchandise Exports (USD bn) 3.6 4.1 4.5 4.5 4.3
Merchandise Imports (USD bn) 6.1 6.9 7.1 7.5 7.9
Merchandise Exports (ann. var. %) 5.4 12.6 8.9 0.7 -4.8
Merchandise Imports (ann. var. %) 17.9 12.5 3.6 6.2 5.2
Foreign Direct Investment (USD bn) 1.1 1.3 0.9 1.1 1.5
International Reserves (USD bn) 3.2 3.2 3.8 4.3 3.6
International Reserves (months of imports) 6.2 5.6 6.5 6.9 5.4
External Debt (USD bn) 12.3 14.0 17.2 19.2 -
External Debt (% of GDP) 36.2 37.1 45.3 44.9 -

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