Michael Atingi-Ego, the BoU Deputy Governor
Uganda’s economic growth is projected to remain below its long-term trend until FY 2025/26, the Bank of Uganda (BoU) has said.
While releasing the Monetary Policy Statement for the month of February 2023 at BoU headquarters in Kampala on Monday afternoon, Michael Atingi-Ego, the BoU Deputy Governor, said the growth outlook is subject to downside risks, including lower-than expected global growth, lower commodity prices, unfavourable weather conditions, a resurgence of supply chain disruptions due to potential escalation of geopolitical tensions, and the risk of higher domestic inflation, which would necessitate further monetary policy tightening.
BoU projects economic growth in the range of 5.0%-5.6% in FY 2022/23.
“Increased external demand for exports, a significant rebound in foreign direct and private investment, which is reflected in strong growth in the quarterly industry and services output, and better supply-chain conditions, are expected to support modestly higher economic growth in the near term, firming further in the outer years,” BoU says.
The Central Bank maintained the Central Bank Rate (CBR), a benchmark lending rate for commercial banks, at 10% with the aim of containing domestic demand pressures, while accommodating and supporting economic recovery.
This is after annual headline and core inflation increased to 10.4% and 9.0% in January 2023 from 10.2% and 8.4%, respectively in December 2022.
