The International Monetary Fund (IMF) said Uganda’s economy is expected to grow 6.3 percent in the 2018/19 (Jul-Jun) fiscal year, slightly higher than the 2018 rate. It was noted that the development was encouraged by robust activity in sectors including manufacturing and construction.
According to the IMF, growth in the 2017/18 fiscal year was 6.1 percent. Inflation is expected to climb but flatten out around the central bank’s target of 5 percent over the next 12 months. A statement released by the IMF said “credit to the private sector has improved, helped by a supportive monetary policy stance. Growth is projected at 6.3 percent in FY18/19, as manufacturing, construction, and services continue to expand”.
Uganda needs a high and sustained economic growth rate to help generate healthy revenues to defray its ballooning public debt load.
The Finance Ministry says Uganda’s debt stands at 41.5 percent of GDP but the central bank has said it believes public indebtedness has already topped 50 percent of the nation’s economic output.
The IMF noted that growth could hit 7 percent over the next five years “if infrastructure and oil sector investments proceed as planned, and private sector credit remains supportive”.
The East African country is set to start pumping crude oil by 2022 at the latest from fields in western areas near the border with Democratic Republic of Congo.