Uganda’s Economy Climbs 6.9 Percent Despite Global Turmoil

(MENAFN) Uganda’s economy continues to demonstrate resilience, achieving strong growth despite global headwinds such as international conflicts and ongoing trade tensions, according to a report released Tuesday by the Ministry of Finance, Planning and Economic Development.

The ministry’s latest economic update reveals that during the first three quarters of the 2024/25 fiscal year—ending June 30—the economy expanded by an average of 6.9 percent. This robust performance was fueled by a mix of government-driven poverty reduction efforts, notably the Parish Development Model, increased investments in long-term capital projects, and a resurgence in consumer spending.

“There was also growth in investments and exports,” the ministry noted.

Uganda’s GDP rose to 61.3 billion U.S. dollars in 2024/25, a significant jump from 53.9 billion dollars the previous year. Despite inflationary pressures globally, annual headline inflation in Uganda remained under control, inching up slightly from 3.8 percent in May to 3.9 percent in June—still within the 5 percent target range.

The country’s export earnings posted a sharp rise in the third quarter (January–March 2025), climbing 39.1 percent to 2.6 billion dollars. This spike was driven by higher export volumes and favorable global pricing for key commodities such as coffee and cocoa. Over the 12 months ending March 2025, Uganda’s total exports reached 11.8 billion dollars, up from 9.56 billion dollars the previous year.

Meanwhile, imports also increased—rising 16.5 percent to 3.05 billion dollars in the same quarter—primarily due to a surge in non-oil private sector imports.

However, the faster pace of export growth helped narrow the country’s trade deficit by 39.1 percent, bringing it down to 461 million dollars.

The report also cited rising investor optimism. Foreign direct investment (FDI) during the January–March 2025 period jumped 26.3 percent to 786 million dollars. Cumulatively, FDI inflows for the year through March totaled 3.48 billion dollars, up from 2.99 billion dollars a year earlier.

Uganda’s balance of payments showed marked improvement, bolstered by a shrinking current account deficit and an increase in international reserves. By June 2025, reserves had grown to 4.3 billion dollars—enough to cover 3.8 months of imports.

Looking forward, the ministry projects economic growth will reach 7 percent for the 2025/26 fiscal year.

As the country's oil and gas sector begins production, the report anticipates medium-term economic growth could accelerate into double-digit territory.

GDP is expected to climb to 66.1 billion dollars in 2025/26, pushing Uganda’s per capita income to 1,324 dollars—up from 1,263 dollars the previous year.

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