Uganda’s economy is expected to grow 6.3 per cent in the 2018/19 fiscal year, slightly higher than the 2018 rate of 6.1 per cent, boosted by robust activity in sectors such as manufacturing and construction, the International Monetary Fund (IMF) said as its staff concluded a mission to Uganda.
Inflation is expected to climb but flatten out around the central bank’s target of 5 percent over the next 12 months, according to IMF.
“Credit to the private sector has improved, helped by a supportive monetary policy stance. Growth is projected at 6.3 per cent in FY18/19, as manufacturing, construction, and services continue to expand,” an IMF statement said.
Uganda needs a high and sustained economic growth rate to help generate required revenues to fund its development agenda and public debt.
The Finance Ministry says Uganda’s debt stands at 41.5 per cent of GDP but the central bank has said it believes public indebtedness has already topped 50 per cent of the nation’s economic output. The Auditor General is also concerned of the country’s increasing debt.
The IMF said growth could rise to 7 per cent over the next five years if infrastructure and oil sector investments go on as planned, and private sector credit remains supportive.
Uganda expects to start pumping crude oil by 2022 at the latest from fields in western areas near the border with Democratic Republic of Congo. However IMF said that could happen in 2023.