Current account widens to $117m
Jun 07, 2009
UGANDA’S current account balance widened to a deficit of $117.5m in February because of an increase in trade deficit, the Bank of Uganda (BOU) data showed last week.
By Sylvia Juuko
UGANDA’S current account balance widened to a deficit of $117.5m in February because of an increase in trade deficit, the Bank of Uganda (BOU) data showed last week.
This compares to a deficit of $122m that was recorded in February 2008.
“The decline in current account was largely explained by a rising trade deficit,†said Mary Katarikawe, the central bank’s director for research, while releasing the monthly economic indicator’s report for March.
The current account tracks a country’s trade with the rest of the world in goods, exports, imports, services, income and transfers.
The BOU data showed that total imports rose to $330m in February from $293m recorded in February last year.
While the oil import bill of the private sector contracted to $34m due to decreased international oil prices, its non-oil imports went up sharply to $276m, which is $55m higher than last year.
These imports included machinery, vehicles and accessories, chemicals and animal fats and oils and base metals and their products.
Economists said the global economic recession had hit the demand and price of Uganda’s exports, which has led to deterioration of terms of trade.
The export proceeds declined to $218m in February from $257m recorded at the same time last year.
According to the central bank, the capital and financial account recorded a surplus of $49m in February compared to that of $89m during the corresponding period last year.
Gross foreign reserves on the other hand, amounted to over $2b in February, or the equivalent of about 5.4 months of future import cover. This compares to $2.65b or 6.2 months in March 2008.
Commercial banks held $264.3m in foreign exchange compared with $389.3m in same month last year.
Like other emerging economies, the country has faced an onslaught from high inflation and the world economic downturn.
East Africa’s economies have also suffered from lower commodity exports and remittances from abroad.
Their currencies have also been battered by the US dollar.
UGANDA’S current account balance widened to a deficit of $117.5m in February because of an increase in trade deficit, the Bank of Uganda (BOU) data showed last week.
This compares to a deficit of $122m that was recorded in February 2008.
“The decline in current account was largely explained by a rising trade deficit,†said Mary Katarikawe, the central bank’s director for research, while releasing the monthly economic indicator’s report for March.
The current account tracks a country’s trade with the rest of the world in goods, exports, imports, services, income and transfers.
The BOU data showed that total imports rose to $330m in February from $293m recorded in February last year.
While the oil import bill of the private sector contracted to $34m due to decreased international oil prices, its non-oil imports went up sharply to $276m, which is $55m higher than last year.
These imports included machinery, vehicles and accessories, chemicals and animal fats and oils and base metals and their products.
Economists said the global economic recession had hit the demand and price of Uganda’s exports, which has led to deterioration of terms of trade.
The export proceeds declined to $218m in February from $257m recorded at the same time last year.
According to the central bank, the capital and financial account recorded a surplus of $49m in February compared to that of $89m during the corresponding period last year.
Gross foreign reserves on the other hand, amounted to over $2b in February, or the equivalent of about 5.4 months of future import cover. This compares to $2.65b or 6.2 months in March 2008.
Commercial banks held $264.3m in foreign exchange compared with $389.3m in same month last year.
Like other emerging economies, the country has faced an onslaught from high inflation and the world economic downturn.
East Africa’s economies have also suffered from lower commodity exports and remittances from abroad.
Their currencies have also been battered by the US dollar.