By Apollo Mubiru
Uganda’s Gross Domestic Product (GDP) growth fiscal year 2014/15 is projected at 6.1%, finance minister, Maria Kiwanuka has said.
Presenting the national budget on Thursday the minister said cash crops production, manufacturing, mining and quarrying, increased electricity production, and transport and communication are projected to be the major drivers of growth.
“Uganda’s economy continued to grow through Financial Year 2013/14 albeit more modestly than the 6.2% that was projected year ago,” she said.
This was a result of a slow-down in performance by the manufacturing, construction, telecommunication and financial services sub-sectors, Kiwanuka added.
The theme for the 2014/15 budget is “Maintaining the Momentum: Infrastructure Investment for Growth and Socio-Economic Transformation.”
According to the minister, the ongoing unrest in the region reduced our export and remittance proceeds, and the last stages of the global crisis effects were played out on the world stage towards a new equilibrium.
“Although the estimated growth has been less than expected it still represents a credible performance by our economy, and is higher than the average growth achieved by the non-oil producing countries in sub Saharan Africa, estimated at 5.3 percent in 2013,” she stated.
The minister reiterated Government’s medium term objective to restore real GDP growth to 7 percent per annum.
She said that: “This will require continued implementation of sound macro-economic policies, implementation of financial sector reforms and the acceleration of the intervention required in removing bottlenecks to private sector development and competitiveness.”
On inflation, she said inflation has remained low this year and dropped to 5.4% by May 2014. Annual core inflation declined to 3.3% as of end-May 2014.
The minister attributed this to the slowdown in price increases followed a reduction in food prices resulting from drought in the first half of this financial year.
The price increases were contained by coordinated prudent fiscal and monetary policy management. Maintaining low inflation continues to be a key objective of Government’s macroeconomic policy in order to ensure a stable investment climate and preserve the welfare of Ugandans.