Finance Minister, Matia Kasaija
Uganda’s economy expanded by 2.9% in FY 2019/20, which is lower than the earlier estimate of 3.1%, the Performance of the Economy Report September 2020 released by Ministry of Finance has revealed.
“Economic growth outturns released by UBOS show that the Ugandan economy expanded by 2.9% in FY 2019/20, which is lower than the earlier estimate of 3.1% and also a significant slowdown compared to the 6.8% registered for the previous year,” the report reads in part.
It adds that the slowdown in growth is attributed to the adverse effects of the Corona virus pandemic on economic activities during the second half of the financial year.
“The revision from an earlier estimate of 3.1% to the outturn of 2.9% was because the effect of the pandemic on the subsectors of education, construction and accommodation and food services turned out more severe than earlier thought,” the report says.
It reveals that agriculture was the most resilient sector in FY2019/20, expanding by 4.8% while the industry sector was most hit by the impacts of the pandemic, growing by just 2.2% compared to the 10.1% growth it registered in FY2018/19.
“Similarly, the services sector also slowed down, growing at 2.9% down from the 5.7% registered last financial year,” the report reads.
The Purchasing Managers’ Index (PMI) for September 2020 was registered at 54.5, a slight decline from the 54.6 registered in August 2020 but still above the threshold of 50 for the third month in a row.
This, the report says, signaled sustained growth in the private sector as four of the five monitored sectors registered growth during the month.
“Business sentiment remained positive with further growth of outputs and new orders, increase in employment and customer demand as the border was reopened. The CIEA for August 2020 was 151.9, registering a 1.0% growth from 150.3 in July 2020 implying a general improvement in economic activity for the month,” the report says.
It adds that the Business Tendency Index ( BTI )for September 2020 was measured at 50.8, its first time above the threshold of 50 since February 2020. This implies that there was optimism in the business environment for the first time in the past six months and also shows confidence that the country is on a path to economic recovery.
