Statistics from the last financial year ending June 2018 indicate a significant growth in Uganda’s economy contrary to June 2017.
A survey (PMI) from Stanbic Bank indicates that, At 53.2, slightly down from 53.9 in May 2018, shows a steadily growing private sector that continues to grow.
Releasing this year’s June survey findings, Jibran Qureishi, Regional Economist E.A at Stanbic Bank said, “The Purchase Manager Index has averaged at 53.0 in the second quarter this year from 52.1 in the first, indicating that the underlying trend is on the upward trajectory. Moreover, the recently announced F2018/19 budget which was expansionary in nature, suggests that government plans to invest in oil related infrastructure projects over the next couple of years. This should help support GDP growth, especially if local content laws are respected to ensure inclusivity. However cost pressures for firms are likely to rise over the coming months owing to the lag impact of the weaker exchange rate in addition to higher international oil prices.”
Speaking about the underlying reasons behind possible cost increases, Benoni Okwenje, the Fixed Income Manager at Stanbic Bank said, ‘‘Cost pressures are mainly driven by the performance of the Uganda shilling. The currency has come under pressure in the past few months as a result of a combination of domestic factors, a weak balance of payments position and the global strengthening of the dollar. This is unlikely to be countered by exports in the short term with Uganda’s export markets contracting significantly.”
The June survey revealed that output growth contributed to the overall improvement in business performance, with firms citing stronger demand and promotional activities.
“New orders also increased in June, as the customer pool grew. Moreover, both output and new orders rose across all five sub-sectors monitored by the survey,” the report
Firms continued to pass on higher input prices, with output charges increasing for the twenty-fifth month in succession. Moreover, survey data signaled that average selling prices rose across all sub-sectors monitored by the survey.
