KAMPALA — Uganda’s economy is expected to grow 6,3% in the 2018/19 (July-June) fiscal year, slightly higher than the 2018 rate, helped by robust activity in sectors including manufacturing and construction, the International Monetary Fund (IMF) said.
Growth in the 2017/18 fiscal year was 6,1%. Inflation is expected to climb, but flatten out around the central bank’s target of 5% over the next 12 months, according to the IMF.
“Credit to the private sector has improved, helped by a supportive monetary policy stance. Growth is projected at 6,3% in FY18/19, as manufacturing, construction, and services continue to expand,” an IMF statement said.
The East African country badly needs a high and sustained economic growth rate to help generate healthy revenues to defray its ballooning public debt load.
The Finance Ministry says Uganda’s debt stands at 41.5 percent of gross domestic product, but the central bank has said it believes public indebtedness has already topped 50% of the nation’s economic output.
The IMF said growth could hit 7% over the next five years “if infrastructure and oil sector investments proceed as planned, and private sector credit remains supportive”.
Uganda expects to start pumping crude oil by 2022 at the latest from fields in western areas near the border with Democratic Republic of Congo.