Economy showing signs of recovery - survey
Stanbic chief executive officer Patick Mweheire (left) and Ubos director macroeconomic statistics Chris Mukiza launch the Private Sector Index on Wednesday. COURTESY PHOTO
What you need to know:
- According to Mr Patrick Mweheire, the Stanbic Bank Uganda chief executive officer, the trend being seen in the economy is that the second half of the financial year is showing signs of recovery in the business environment.
- Mr Chris Mukiza, the director macro-economic statistics at the Uganda Bureau Statistics said: “More optimism is from the improving weather conditions in the economy.”
Kampala. A survey of 400 private sector companies indicates that they are increasing output and production, with prospects for the economy recovering.
The Stanbic Bank Uganda Purchasers Managers Index (PMI), a new monthly index, was launched in Kampala on Wednesday as a survey of business conditions in the country.
According to the survey, in the nine out of 10 months of data collected, there has been a recorded expansion in the economy.
“Uganda’s private sector is recovering from the effects of the last election cycle and the global economic slowdown. At 53.5 in March 2017, up from 50.9 in February 2017, the seasonally adjusted PMI pointed to further improvement in business conditions for private sector firms in March,” Ms Anne Juuko, the head of global markets said at the launch of the inaugural PMI report for Uganda at the Kampala Serena Hotel.
The recovery was seen in the agricultural, industry, services, wholesale and retail segments.
This optimism from business leaders in the private sector also comes at a time the economy is poised for slower growth than projected in the financial year 2016/17.
Bank of Uganda (BoU) projects the economy to struggle to reach 4.5 per cent growth in 2016/17.
Most of this, according to BoU is a factor of adverse weather conditions and low economic activity in the six months to December 2016.
However, according to Mr Patrick Mweheire, the Stanbic Bank Uganda chief executive officer, the trend being seen in the economy is that the second half of the financial year is showing signs of recovery in the business environment.
“There are a number of things in the economy showing that the economy is trying to cool. When you look at private sector credit, it is improving. We believe that that is going to improvement investment in the economy,” he said.
Additionally, Mr Chris Mukiza, the director macro-economic statistics at the Uganda Bureau Statistics said: “More optimism is from the improving weather conditions in the economy.”
Uganda is the 32nd country in the world to use the PMI, which has become a globally recognised data indicator to show the situation in several economies. The data survey measures output by companies, job creation, costs of operations, pricing and purchases among others. For improving market conditions, the average weight is above 50 and when business conditions are bad, it drops below 50. When it is a flat 50, it shows economic conditions are not changing.
