Uganda’s economy grows 6.6% in FY 2024/2025 quarter one

16 October 2024, 12:19 pm

By Ronald Ssemagonja

The Ministry of Finance, Planning and Economic Development, through their Permanent Secretary and Secretary to the Treasury (PSST) Ramathan Goobi, yesterday released the first quarter expenditure for Financial Year (FY) 2024/2025 at the Ministry headquarters in Kampala. The PSST first explained to the media and the country at large the state of the economy and confirmed that there has been a significant growth according to the report. “There is continued expansion of Uganda’s economy. This is confirmed by the recently released quarterly GDP outturns for the second quarter of calendar for 2024 (April-June 2024) which showed that the economy expanded by 6.6%.” he said.

Goobi continued to say that the higher frequency indicators show improvements in the level of economic activity and positive sentiments by the private sector about doing business in the economy going forward. “The composition index of economic activity rose to 166.63 in August 2024 from 166.03 in July 2024. Similarly, both the purchasing managers index and the business tendency index were recorded at 54.2 and 57.8 respectively in September 2024. This is above the threshold of 50, implying that the business health and sentiments in the private sector are positive” he said.

Regarding the issue of inflation and exchange rate, the PSST says that inflation remains subdued with annual headline inflation declining to 3.0% for the year ending in September 2024. “This was mainly driven by good harvests of food crops which has resulted in lower prices for food items. Additionally, the central bank’s monitory policy stance has played a part in ensuring price stability” he explained. According to Goobi, the debt of the country is still managed very well. “As of 15th October 2024, the government had issued domestic debt amounting to Shillings 6.825 trillion of which Shillings 3.350 trillion was for financing general budget activities. Looking ahead, inflation outlook is good and the central bank in response reduced the CBR from 10% to 9.75% on 7th October 2024. We, therefore, expect interest rates on government securities to be steady with possibility of reduction. We shall not borrow at any cost, we shall borrow only when the cost is affordable. I reiterate, that the government debt position is sustainable and within Internationally recognised benchmarks”. Goobi said.

According to the Ministry, Shillings 72.137 trillion is the approved budget for FY 2024/2025. On wage is Shs. 7,934.75 billion. None wage Shs. 13,633.24 billion. Government development Shs. 5,902.58 billion. External Financing Development Shs. 9,582.94 billion. Debt and Treasury operations Shs. 34.342.16 billion. Arrears Shs. 199.93 billion. Local revenue Shs. 293.90 billion and ICJ award to DRC 247.00 billion. It should be remembered that the government of Uganda discretionary budget (excluding debt and treasury operations external financing and local revenue) is Shs. 27.917 trillion. The PSST concluded by thanking the civil society for supporting the budget transparency initiative and urged them to make use of their website for correct information.