Mutebile added that the slowdown of the economy throughout 2019 has been driven by both slowing global activity and domestic factors highlighting a low growth rate in tourism receipts as well as merchandise exports excluding gold and re-exports as the main causes. Still, Mutebile said he expected the economy to grow at a strong rate.
“Tourism earnings, exports and bank borrowing have grown lower than we had expected but the economy will still grow at a rate between 5.5 per cent and 6 per cent which is still higher than the growth in neighbouring countries and we expect to sustain it into 2020,” Mutebile said.
On the current rate of inflation, Bank of Uganda indicated that even though the Consumer Price Index – a measure of inflation – data for November 2019 released by the Uganda Bureau of Statistics shows that inflation remained subdued, annual headline and core inflation rose to three per cent and 2.9 per cent respectively from 2.5 per cent and 2.6 per cent in October. However, annual core inflation is projected to remain below the five per cent target until the fourth quarter of 2020.
“The increase in inflation was in part driven by higher food crop, energy, fuel and utility prices but our relatively stronger shilling and subdued domestic demand will contribute to moderation of the increase in inflation,” Mutebile added.
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