Bank of Uganda (BoU) has said Uganda’s economy is doing well.
This was revealed on Monday when BoU maintained its policy rate Central Bank Rate (CBR) at 9.5 per cent. Its decision was based on recovery in the economy especially in agricultural sector, low inflation rate, stable foreign exchange market, pick up in private sector credit growth and reduction in lending rate.
Uganda’s inflation slowed down to 4.0 per cent which is below the Central Bank monetary policy target of maintaining it at 5 per cent. The average lending rate in commercial banks now stands at 18.9 per cent from 24 per cent following the sustained reduction of the CBR for the last nine months by 7 per cent percentage.
Presenting the monetary policy statement December 2017, the Deputy Governor BoU Dr Louis Kasekende, said: “Based on the outlook for inflation and economic activity, together with an expansionary fiscal policy in FY2017/18; and the evolution of the risks and uncertainties, BoU judges that the current stance of the monetary policy remains appropriate.”
Mr Kasekende explained that domestic economic activity continues to strengthen as financial conditions ease and agricultural output returns to normal.
The revised Gross Domestic Product (GDP) data for the FY2016/17 released by Uganda Bureau of Statistics indicates that the economy grew at 4.0 per cent, driven by improved performance of agricultural and services sectors. Private consumption also improved in FY2016/17 relative to the previous two years.