IMF lowers Uganda’s economic growth forecast
Uganda’s economy will grow at 3.5% for the financial year ending June 30th 2017 according to the recent International Monetary Fund (IMF) report. Uganda’s economy was estimated to grow at 5% for the FY 2016/17.
Due to the prolonged drought and slow private credit growth in the second quarter of 2017, it brings the economic forecast down to 3.5% from the earlier 5%.
According to IMF, the improving weather conditions could still push the economy reach the previous economic forecast of 5%. Headline inflation currently stands at 6.8%, and core inflation at 4.5%. The government also says it needs to increase tax collections as some specific measures need to be followed up.
Uganda’s economy was estimated to grow between 4%-5% for the FY2016/17, according to World Bank as the impact of the drought recedes, distress from the banking system is contained, and the execution of the public projects improves.
This rate of growth was expected to accelerate to about 5.1% in FY18, and average 5.6% in FY19. However, Uganda might have to lower its forecast as drought and a slow private sector growth continues to bite hard.