President Yoweri Museveni with IMF boss Christine Lagarde
EC Village Verification

Uganda’s economy is expanding by 5 percent in the 2017/18 fiscal year, up from 4 percent in the previous year, helped by favourable weather, the International Monetary Fund (IMF) has said.

“Growth is projected to reach 5 percent in 2017/18 (July-June) from 4 percent in 2016/17, supported by better weather conditions,” the IMF said.

Buoyed by conducive weather conditions, Uganda, Africa’s biggest coffee exporter cultivates a range of other agricultural commodities including tea, cocoa and tobacco, maize, beans for export.

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Private sector credit growth remained slow, and the IMF praised the central bank-Bank of Uganda (BOU) for extending its ongoing policy easing cycle. Last month Bank of Ugandan, the central bank in October cut its benchmark policy rate by 50 basis points to 9.5 percent.

It was the first time BOU had lowered the rate to below 10 percent since the country introduced an inflation targeting monetary policy in 2011.

The IMF said core inflation was projected to remain around the medium term target of 5 percent.