Uganda's economy shows resilience amid global challenges — report

KAMPALA - Uganda's economy remains robust, posting sustained growth despite global uncertainties such as trade tensions and international conflicts, the Ministry of Finance, Planning and Economic Development said in a report released Tuesday.

According to the report on the state of the economy, growth in the first three quarters of the 2024/25 financial year, which ended on June 30, averaged 6.9 percent.

The ministry attributed this to increased government spending on poverty alleviation programs like the Parish Development Model, higher fixed capital formation, and a rebound in household consumption.

"There was also growth in investments and exports," the ministry said.

Uganda's economy expanded to 61.3 billion U.S. dollars in 2024/25, up from 53.9 billion dollars the previous year. Annual headline inflation stayed within the 5 percent target, rising slightly to 3.9 percent in June from 3.8 percent in May.

Export earnings in the third quarter (January-March 2025) climbed 39.1 percent to 2.6 billion dollars, driven by stronger volumes and international prices for commodities like coffee and cocoa. For the 12 months to March 2025, total exports reached 11.8 billion dollars, up from 9.56 billion dollars a year earlier.

Meanwhile, Uganda's import bill rose by 16.5 percent to 3.05 billion dollars in the third quarter, mainly due to non-oil private sector imports.

However, with exports growing faster than imports, the trade deficit narrowed by 39.1 percent to 461 million dollars.

The report also highlighted increased investor confidence. Foreign direct investment (FDI) rose 26.3 percent to 786 million dollars in January-March 2025, while total FDI for the year to March 2025 reached 3.48 billion dollars, compared to 2.99 billion dollars a year earlier.

Uganda's balance of payments improved, supported by a declining current account deficit and higher international reserves, which grew to 4.3 billion dollars -- covering 3.8 months of imports -- by June 2025.

Looking ahead, the ministry projects an economic growth of 7 percent for the 2025/26 financial year.

As oil and gas production comes on stream, growth is expected to reach double digits in the medium term, the report said.

The economy is forecast to expand to 66.1 billion dollars this year, translating into a higher GDP per capita of 1,324 dollars, up from 1,263 dollars in 2024/25.