Uganda’s economic growth is projected to average 6.5% in the next three years, the Bank of Uganda (BoU) has said.
Releasing the Monetary Policy Statement for April 2018 at BoU had offices in Kampala on Monday, Prof. Emmanuel Tumusiime-Mutebile, the BoU Governor said that Uganda’s economy continues to recover.
He noted that the Composite Index of Economic Activity (CIEA), which is BoU’s high frequency indicator of real economic activity points to a relatively robust economic growth in Financial Year (FY) 2017/18.
“In the year to February 2018, the CIEA projects growth of about 6.4%,” Mutebile said, adding: “In addition, the Quarterly Gross Domestic Product (GDP) for 2017 released by UBOS (Uganda Bureau of Statistics) indicates growth of 6.3% in 2017 compared to 3.0% in 2016.”
He revealed that Uganda’s continued economic recovery is premised on a favourable external scenario, strong private and public investments, improved agricultural productivity, and the absence of significant macroeconomic imbalances.
He however said downside risks to the outlook remain. These include concerns over fiscal absorption and weak private sector credit growth.
Bank of Uganda maintained the Central Bank Rate (CBR), a benchmark lending rate for commercial banks at 9% on the back of contained inflation. Annual headline inflation declined to 2.0% in March 2018 from 2.1% in February 2018 largely because of a decline in food crop inflation which dropped to minus 1.7% in March 2018 from minus 0.7% in February 2018. Annual Core inflation remained unchanged at 1.7% while Energy, Fuel and Utilities (EFU) inflation declined to 10.3% in March 2018 from 11.2% in February 2018.